Franklin Glass Works Uses a Standard Cost System in Which

Franklin Glass Works uses a standard cost system in which manufacturing overhead is applied to units of product on the basis of direct labour-hours. Each unit requires two standard hours of labour 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 overhead rate was £3.00 per unit. The actual data pertaining to the manufacturing overhead for the year are presented below: $$\begin{array} { l l } \text { Actual production } & 198,000 \text { units } \\\text { Actual direct labour-hours } & 440,000 \text { direct labour-hours } \\\text { Actual variable overhead } & £ 352,000 \\\text { Actual fixed overhead } & £ 575,000\end{array}$$
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The fixed overhead applied to Franklin's production for the year is

A) £484,200.
B) £575,000.
C) £594,000.
D) £600,000.

Correct Answer:

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