Asked by Murali Krishna on Jul 14, 2024
Verified
Lab Corp. uses a standard cost system. Direct labour information for Product CER for the month of October follows: Standard direct labeuf rate $6.00 per hour Actual direct labour rate paid $6.10 per hour Standard hours allowed for actual productaon 1,500 hours Laboua efficiency variance-unfavourable 5600\begin{array} { | l | l | l | } \hline \text { Standard direct labeuf rate } & \$ 6.00 & \text { per hour } \\\hline \text { Actual direct labour rate paid } & \$ 6.10 & \text { per hour } \\\hline \text { Standard hours allowed for actual productaon } & 1,500 & \text { hours } \\\hline \text { Laboua efficiency variance-unfavourable } & 5600 & \\\hline\end{array} Standard direct labeuf rate Actual direct labour rate paid Standard hours allowed for actual productaon Laboua efficiency variance-unfavourable $6.00$6.101,5005600 per hour per hour hours What are the actual hours worked?
A) 1,598.
B) 1,402.
C) 1,600.
D) 1,400.
Actual Hours
The real number of hours worked, as opposed to planned or scheduled hours.
Standard Cost System
An accounting method that uses cost estimates for materials, labor, and overhead to control business costs.
- Evaluate the differences in material and labor, reflecting on price, quantity, rate, and efficiency variances.
Verified Answer
BB
Bubblie BlondieJul 14, 2024
Final Answer :
C
Explanation :
The actual hours worked can be calculated by adjusting the standard hours allowed for the actual production by the labour efficiency variance. Since the variance is unfavourable, it means more hours were worked than planned. Therefore, 1,500+100=1,6001,500 + 100 = 1,6001,500+100=1,600 hours were actually worked.
Learning Objectives
- Evaluate the differences in material and labor, reflecting on price, quantity, rate, and efficiency variances.