Asked by Sallye Ferguson on Jun 13, 2024
Verified
Piper Corporation's standards call for 1,000 direct labor-hours to produce 250 units of product. During October the company worked 1,250 direct labor-hours and produced 300 units. The standard hours allowed for October would be:
A) 1,250 hours
B) 1,000 hours
C) 1,200 hours
D) 1,300 hours
Standard Hours Allowed
The number of labor hours that should have been worked according to budgeted productivity levels for the actual level of production achieved.
- Evaluate the data to compute the prescribed standard hours for manufacturing activities.
Verified Answer
CM
Christine MatosJun 19, 2024
Final Answer :
C
Explanation :
The standard hours allowed can be calculated using the formula:
Standard hours allowed = (Actual output / Standard output) x Standard direct labor hours
Standard output = (Direct labor-hours required to produce standard output / Standard output quantity) x Actual output quantity
Given:
Standard output quantity = 250 units
Direct labor-hours required to produce standard output = 1,000 hours
Actual output = 300 units
Actual direct labor-hours = 1,250 hours
Using the above formulae we get,
Standard output = (1000 / 250) x 300 = 1200 units
Standard hours allowed = (300/1200) x 1000 = 250 x 4 = 1200 hours
Hence, the answer is C.
Standard hours allowed = (Actual output / Standard output) x Standard direct labor hours
Standard output = (Direct labor-hours required to produce standard output / Standard output quantity) x Actual output quantity
Given:
Standard output quantity = 250 units
Direct labor-hours required to produce standard output = 1,000 hours
Actual output = 300 units
Actual direct labor-hours = 1,250 hours
Using the above formulae we get,
Standard output = (1000 / 250) x 300 = 1200 units
Standard hours allowed = (300/1200) x 1000 = 250 x 4 = 1200 hours
Hence, the answer is C.
Learning Objectives
- Evaluate the data to compute the prescribed standard hours for manufacturing activities.
Related questions
Piper Corporation's Standards Call for 8,000 Direct Labor-Hours to Produce2,000 ...
The Fime Corporation Uses a Standard Costing System ...
Greyson Company Produced 8,300 Units of Product That Required 4 ...
The Standard Amount of Materials Allowed for the Actual Output ...
To Measure Controllable Production Inefficiencies, Which of the Following Is ...