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 denominator activity level in direct labor-hours used by Hawkins in setting the predetermined overhead rate for February is:

A) 9,300 hours
B) 8,400 hours
C) 9,000 hours
D) 8,700 hours