Franklin Glass Works uses a standard cost system in which manufacturing overhead

Question

Franklin Glass Works uses a standard cost system in which manufacturing overhead is applied on the basis of standard direct labor-hours. Each unit requires two standard hours of direct labor for completion. The denominator activity for the year was based on budgeted production of 200,000 units. Total overhead was budgeted at $900,000 for the year, and the fixed manufacturing overhead rate was $1.50 per direct labor-hour. The actual data pertaining to the manufacturing overhead for the year are presented below:



The standard hours allowed for actual production for the year total:
495,000
247,500
400,000
396,000



The fixed manufacturing overhead applied to Franklin's production for the year is:
$594,000
$600,000
$575,000
$484,200


Franklin's fixed manufacturing overhead volume variance for the year is:
$19,000 favorable
$25,000 favorable
$55,000 unfavorable
$6,000 unfavorable

Explanation / Answer

400,000 $484,200 $55,000 unfavorable

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