Oslund Company Manufactures Only One Product and Uses a Standard

Multiple Choice

Oslund Company manufactures only one product and uses a standard cost system. During the past month, the following variances were observed: $\begin{array}{lc}\text { Direct labor rate variance } & \$ 30,000 \text { favorable } \\\text { Direct labor efficiency variance } & 50,000 \text { unfavorable } \\\text { Variable overhead efficiency variance } & 20,000 \text { unfavorable } \\\text { Standard direct labor hours (DLH) per unit of output } & 5.00\end{array}$ Oslund applies variable overhead using a standard rate of $20.00 per standard DLH allowed. During the month, Oslund used 20% more DLHs than the total standard hours allowed for the units manufactured.

What were the total standard DLHs (to the nearest whole number) for the units manufactured by Oslund Company during the past month?

A) 1,000.
B) 2,500.
C) 4,000.
D) 5,000.
E) 6,000.