Question

Piper Corporation’s standards call for 6,000 direct labor-hours to produce 1,500 units of product. During October the company worked 1,350 direct labor-hours and produced 1,350 units. The standard hours allowed for October would be:

Answer 1

Answer:

The standard hours allowed for October would be 5,400 hours

Explanation:

For computing the standard hours allowed for the October month, first, we have to compute the standard per hour unit which is shown below:

= Standard direct labor ÷ Number of units to be produced

= 6,000 ÷ 1,500

= $4

Now, in October month, the direct labor worked for the 1,350 hours and the standard price per unit is $4, So standard hours allowed is

= October direct labor hours × standard price per unit

= 1,350 hours × $4

= $5,400 hours