Question

7) Krizun Industries makes heavy construction equipment. The standard for a particular crane calls for 20 direct labor-hours at $24 per direct labor-hour. During a recent period 875 cranes were made. The labor efficiency variance was $1,200 Unfavorable. How many actual direct labor-hours were worked

Answer 1

Number of actual hours worked = 17,550 hours

Step-by-step explanation:

Efficiency variance in labour hours = labour efficiency variance/standard labour cost/ hour

The standard labour cost per hour = $24

= 1,200/24= 50 hours

Labour variance (in hours) = Actual labour hours- Standard hours for the actual units

The standard labour hours allowed for the actual 875 cranes made:

= 20 × 875 = 17,500 hours

let the actual hours be " y "

50 = y - 17500

y = 50 + 17500

y= 17,550 hours

Number of actual hours worked = 17,550 hours