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andrew-mc [135]
3 years ago
9

The actual cost of direct labor per hour is $14.75. Two and one half standard direct labor hours are allowed per unit of finishe

d goods. During the current period, 3400 units were produced using 8300 direct labor hours. The direct labor efficiency variance is $3100 favorable. Calculate the standard direct labor rate per hour.
Business
1 answer:
Vinil7 [7]3 years ago
3 0

Answer:

Standard Rate per hour = $15.5 per hour

Explanation:

given data

actual cost = $14.75

current period = 3400 units

direct labor hours = 8300

direct labor efficiency variance = $3100

to find out

standard direct labor rate per hour

solution

we use here Direct Efficiency Variance formula that is  

Direct Efficiency Variance = ( Standard Hours - Actual Hours ) ×  Standard Rate per Hour    .............................1

put here value    

3100 = [ (3400 × 2.5) - 8300  ] × Standard Rate per hour

solve it we get

Standard Rate per hour = $15.5 per hour

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