Question - Cannon Company's standard fixed overhead cost is $5 per direct labour hour on the basis of budgeted fixed costs of $500,000. The standard allows one direct labour hour per unit. During the current year, Cannon produced 110,000 units of product, incurred $550,000 of fixed overhead costs, and recorded 212,000 actual hours of direct labour. What is the standard activity level on which Cannon based its fixed overhead rate?

50,000 direct labour hours

100,000 direct labour hours

105,000 direct labour hours

110,000 direct labour hours