The standard cost card for the single product manufactured by Prince Company is given below:

Standard Cost Card'Per Unit

Direct materials, 3.5 feet at $4 per foot . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $14.00

Direct labor, 0.8 direct labor-hours at $18 per direct labor-hour . . . . . . . . . . . . . . 14.40

Variable overhead, 0.8 direct labor-hours at $2.50 per direct labor-hour . . . . . . . 2.00

Fixed overhead, 0.8 direct labor-hours at $6 per direct labor-hour . . . . . . . . . . . . 4.80

Total standard cost per unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $35.20

Last year, the company produced 10,000 units of product and worked 8,200 actual direct labor-hours. Manufacturing overhead cost is applied to production on the basis of direct labor-hours. 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 budgeted fixed overhead cost for the year?
3. What was the budget variance for the year?
4. What denominator activity level did the company use in setting the predetermined overhead rate for theyear?

Transcribed Image Text:

Actual Fixed Overhead Cost $45,600 Budgeted Fixed Overhead Cost 2 Fixed Overhead Cost Applied to Work in Process ?-hours x $6 per hour-$ ? Budget variance, $Volume variance, $3,000 F