Question

Croissant Company's standard fixed overhead cost is $6 per direct labor hour based on budgeted fixed costs of $600,000. The standard allows 1 direct labor hour per unit. During the current year, Croissant produced 110,000 units of product, incurred $630,000 of fixed overhead costs, and recorded 212,000 actual hours of direct labor. What is the standard activity level on which Croissant based its fixed overhead rate?

Answer 1

Standard activity level= 100,000 units

Step-by-step explanation:

Giving the following information:

Croissant Company's standard fixed overhead cost is $6 per direct labor hour based on budgeted fixed costs of $600,000. The standard allows 1 direct labor hour per unit.

Standard activity level= 600,000/6= 100,000 units