Question

Workers at Swifty News were paid a total of $40,000 during the month of July. The company's standard wage rate was $8 per hour, and the direct labor rate variance for the month was $1,360 Unfavorable. How many direct labor hours were worked during July?

Answer 1

Based on the given information, the number of direct labor hours worked during July can be calculated using the direct labor rate variance and the standard wage rate.

Step-by-step explanation:

To determine the number of direct labor hours worked during July, we can use the direct labor rate variance and the standard wage rate. The direct labor rate variance represents the difference between the actual labor rate and the standard labor rate per hour. In this case, the direct labor rate variance is $1,360 Unfavorable. Since the variance is unfavorable, it means that the actual labor rate per hour was higher than the standard rate.

We can calculate the difference between the actual labor rate and the standard rate per hour by dividing the direct labor rate variance by the difference in the rates:

Actual labor rate - Standard labor rate = Direct labor rate variance / Difference in rates

Let's assume the actual labor rate per hour is AL and the standard labor rate per hour is SL. We can plug in the values to calculate the difference:

AL - $8 = $1,360 / (AL - $8)

Solving this equation, we find that the actual labor rate per hour (AL) is $9.36. Now, we can determine the number of direct labor hours worked in July by dividing the total amount paid to workers ($40,000) by the actual labor rate per hour ($9.36):

Number of direct labor hours = Total amount paid to workers / Actual labor rate per hour

Number of direct labor hours = $40,000 / $9.36

Calculating this, we find that the number of direct labor hours worked during July was approximately 4,274.18 hours.