Cannon Company's Standard Fixed Overhead Cost Is $5 Per Direct

Multiple Choice

Cannon Company's standard fixed overhead cost is $5 per direct labour hour on the basis of budgeted fixed costs of $500,000. The standard allows one direct labour hour per unit. During the current year, Cannon produced 110,000 units of product, incurred $550,000 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 Cannon 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