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The Hawkins Company uses a standard costing system in which manufacturing overhead is applied on the basis of standard direct labor-hours (DLHs). During February, the
- The Hawkins Company uses a standard costing system in which manufacturing overhead is applied on the basis of standard direct labor-hours (DLHs). During February, the company actually used 9,200 direct labor-hours and made 2,900 units of finished product. The standard cost card for one unit of product includes the following: Variable factory overhead: 3 DLHs @ $4.75 per DLH Fixed factory overhead: 3 DLHs @ $3.00 per DLH For February, the company incurred $28,450 in fixed manufacturing overhead costs and recorded a $900 favorable volume variance. The denominator activity level in direct labor-hours used by Hawkins in setting the predetermined overhead rate for February is:
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