Question

Jackson Company uses a standard cost system. The following information pertains to direct labor for product B for the month of October:

Standard hours allowed for actual production 2,000
Actual rate paid per hour $ 8.40
Standard rate per hour $ 8.00
Labor efficiency variance $ 1,600 U
What were the actual hours worked for the month of October?
O 2,200.
O 2,190.
O 1,810.
O 1,800.

Answer 1

The actual hours worked by Jackson Company for product B in October were 2,200 hours, determined by using the labor efficiency variance and standard rate per hour.

Step-by-step explanation:

To determine the actual hours worked during the month of October, we must analyze the labor efficiency variance provided. The labor efficiency variance is calculated by the formula: (Actual Hours Worked – Standard Hours Allowed) x Standard Rate Per Hour. Given that the labor efficiency variance for Jackson Company is reported as $1,600 U, and the standard rate per hour is $8.00, we can rearrange the formula to solve for the actual hours worked:

1,600 U = (Actual Hours – 2,000) x 8

200 = Actual Hours – 2,000

Actual Hours = 2,200

Therefore, the actual hours worked by Jackson Company for product B in the month of October were 2,200 hours.