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

Answer 1

Answer:

11,120 = actual hours

Explanation:

Giving the following information:

Standard direct labor rate $ 3.75 per hour

Total standard direct labor-hours allowed for the actual production 10,000 hours

Labor efficiency variance of $ 4,200 Unfavorable

To calculate the actual hours, we need to use the following formula:

Direct labor time (efficiency) variance= (Standard Quantity - Actual Quantity)*standard rate

-4,200= (10,000 - actual hours)*3.75

-4,200 = 37,500 - 3.75actual hours

-41,700= - 3.75 actual hours

-41,700/(-3.75)= actual hours

11,120 = actual hours

Direct labor time (efficiency) variance= (10,000 - 11,120)*3.75

Direct labor time (efficiency) variance= $4,200 unfavorable