(Appendix 11A)The Claus Corporation Makes and Sells a Single Product

Multiple Choice

(Appendix 11A) The Claus Corporation makes and sells a single product and uses standard costing.During January, the company actually used 8, 700 direct labor-hours (DLHs) and produced 3, 000 units of product.The standard cost card for one unit of product includes the following: Variable factory overhead: 3.0 DLHs @ $4.00 per DLH.
Fixed factory overhead: 3.0 DLHs @ $3.50 per DLH.
For January, the company incurred $22, 000 of actual fixed manufacturing overhead costs and recorded a $875 favorable volume variance.
The denominator level of activity in direct labor-hours (DLHs) used by Claus in setting the predetermined overhead rate for January is:

A) 9, 500 DLHs
B) 9, 250 DLHs
C) 8, 750 DLHs
D) 10, 500 DLHs