The Hawkins Company Uses a Standard Costing System in Which

Multiple Choice

The Hawkins Company uses a standard costing system in which manufacturing overhead is applied on the basis of standard direct labor-hours (DLHs) . During February, the company actually used 9,200 direct labor-hours and made 2,900 units of finished product. The standard cost card for one unit of product includes the following:

Variable factory overhead: 3 DLHs $4.75 per DLH
Fixed factory overhead: 3 DLHs $3.00 per DLH

For February, the company incurred $28,450 in fixed manufacturing overhead costs and recorded a $900 favorable volume variance.

-The amount of fixed manufacturing overhead cost contained in the company's budget for February is:

A) $27,000
B) $27,550
C) $25,200
D) $29,350