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11 April, 19:55

Franklin Glass Works uses a standard cost system in which manufacturing overhead is applied on the basis of standard direct labor-hours. Each unit requires two standard hours of direct labor for completion. The denominator activity for the year was based on budgeted production of 200,000 units. Total overhead was budgeted at $900,000 for the year, and the fixed manufacturing overhead rate was $1.50 per direct labor-hour. The actual data pertaining to the manufacturing overhead for the year are presented below:Actual production: 198,000 unitsActudal direct labor hours 440,000 direct labor hoursActual variable manufacturing overhead $352,000Actual fixed manufacturing overhead $575,000The standard hours allowed for actual production for the year total:A. 247,500B. 396,000C. 400,000D. 495,000

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  1. 11 April, 21:39
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    Option B

    396,000 labour hours

    Explanation:

    Standard hours allowed for actual production = standard hours * actual production.

    The standard hours per unit of the product is 2 hrs.

    The actual production is 198,000 units

    Standard hours allowed for actual production

    =2 hrs * 198,000

    = 396,000 labour hours
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