The standard cost card for the single product manufactured by Cutter, Inc., is given below:

Manufacturing overhead is applied to production on the basis of standard direct labor-hours. During the year, the company worked 37,000 hours and manufactured 9,500 units of product. Selected data relating to the company’s fixed manufacturing overhead cost for the year are shown below:

Required:

1.         What were the standard hours allowed for the year’s production?

2.         What was the amount of fixed overhead cost contained in the flexible budget for the year?

3.         What was the fixed overhead budget variance for the year?

4.         What denominator activity level did the company use in setting the predetermined overhead rate for the year?

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Standard Cost Card-per Unit Direct materials, 3 yards at $6.00 per yard Direct labor, 4 hours at $15.50 per hour Variable overhead, 4 hours at S1.50 per hour Fixed overhead, 4 hours at $5.00 per hour $ 18 62 20 Total standard cost per unit S106