Question

The Fime Corporation uses a standard costing system. The following data have been assembled for December: Actual direct labor-hours worked 6,200 hours Standard direct labor rate $7 per hour Labor efficiency variance $2,100 Unfavorable The standard hours allowed for December’s production is:

Answer 1

Answer:

5,900= standard quantity

Explanation:

Giving the following information:

Actual direct labor-hours worked 6,200 hours

Standard direct labor rate $7 per hour

Labor efficiency variance $2,100 Unfavorable

To calculate the standard hour, we need to use the following formula:

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

-2,100 = (standard quantity - 6,200)*7

-2,100= 7standard quantity  - 43,400

41,300/7 = standard quantity

5,900= standard quantity

Answer 2

Answer:

The standard hour allowed for December production is 5,900 hours

Explanation:

We will use labor efficiency variance to solve the above.

Labor efficiency variance = Standard rate (Standard hours - Actual hours)

Substituting the values given in the question,

-$2,100 = $7(Standard hour - 6,200)

-$2,100 = 7std hr - 43,400

7 Std hr = - $2,100 + $43,400

7 std hr = $41,300

std hr = 5,900 hours