Question

Total Variable Overhead Variance Mulliner Company showed the following information for the year: Standard variable overhead rate (SVOR) per direct labor hour $3.50 Standard hours (SH) allowed per unit 3 Actual production in units 20,000 Actual variable overhead costs $220,500 Actual direct labor hours 61,200 Required: 1. Calculate the standard direct labor hours for actual production.

Answer 1

Given:

Standard variable overhead rate = $3.50

Standard hours per unit = 3 hours

Actual production in units = 20,000

Find:

Standard direct labor hours for actual production = ?

Computation of standard direct labor hours for actual production.

Standard direct labor hours for actual production = Actual units produced × Standard Hours per unit

Standard direct labor hours for actual production = 20,000 × 3 hours

Standard direct labor hours for actual production = 60,000 hours