Crawford Company’s Standard Fixed Overhead Cost Is $6 Per Direct

Multiple Choice

Crawford Company’s standard fixed overhead cost is $6 per direct labour hour based on budgeted fixed costs of $600,000. The standard allows 1 direct labour hour per unit. During 2006, Crawford produced 110,000 units of product, incurred $630,000 of fixed overhead costs, and recorded 212,000 actual hours of direct labour.
-Refer to the figure.What is the standard activity level on which Crawford based its fixed overhead rate?

A) 50,000 direct labour hours
B) 100,000 direct labour hours
C) 105,000 direct labour hours
D) 110,000 direct labour hours