Exhibit 19-7 the Following Figures Represent 100% Capacity for Starr

Multiple Choice

Exhibit 19-7 The following figures represent 100% capacity for Starr Manufacturing:
Starr Manufacturing normally produces at 100% capacity. During the month of October, the company started and completed 10,000 units of product, using variable manufacturing overhead costs of $20,000. The company used 6,400 direct labor hours in October instead of the 6,000 hours expected for the activity level achieved.
-Refer to Exhibit 19-7. Based on the information above, the overhead rate used to apply variable manufacturing overhead to Work-in-Process is:

A) $0.80 per unit produced
B) $1.20 per unit produced
C) $1.20 per direct labor hour
D) $3.00 per direct labor hour