Question

Information on Westcott Corporation's direct labor costs for a recent month follows: Standard direct labor rate $ 3.75 per hour Actual direct labor rate $ 3.50 per hour Total standard direct labor-hours allowed for the actual production 10,000 hours Labor efficiency variance $ 4,200 Unfavorable What were the actual hours worked during the month, rounded to the nearest hour? Multiple Choice 10,714 11,120 11,200 11,914

Answer 1

Answer:

11,120 hours

Explanation:

In this question, we apply the labor efficiency variance which is shown below:

Labor Efficiency Variance = (Actual Hours × Standard Rate) - (Standard Hours × Standard Rate)

$4,200 Unfavorable = (Actual Hours x $3.75) - (10,000 hours x $3.75)

$4,200 Unfavorable = (Actual Hours x $3.75) - $37,500

$41,700 =  (Actual Hours x $3.75)

So, the actual hours would be

= $41,700 ÷ $3.75

= 11,120 hours