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Oklahoma Manufacturing Company uses a standard cost accounting system. In 2012, the
company produced 28,300 units. Each unit took several pounds of direct materials and 1
Solution
Labor quantity (or efficiency) variance = Standard Rate per hour x (Standard Labor hours for
actual production - Actual labor hours)
Given that:
Labor quantity variance = $5280 unfavorable
Standard rate = $12 per hour
Standard labor hours for actual production = Actual production x Standard labor hour per unit
= 28,300 x 1.50
= 42450 labor hours
Substituting values:
-5280 = 12 x (42450 - AH)
-440 = 42450 - AH
AH = 42450 + 440
Actual direct labor hours = 42890 hours (Answer)
Oklahoma Manufacturing Company uses a standard cost accounting system-.docx

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Oklahoma Manufacturing Company uses a standard cost accounting system-.docx

  • 1. Oklahoma Manufacturing Company uses a standard cost accounting system. In 2012, the company produced 28,300 units. Each unit took several pounds of direct materials and 1 Solution Labor quantity (or efficiency) variance = Standard Rate per hour x (Standard Labor hours for actual production - Actual labor hours) Given that: Labor quantity variance = $5280 unfavorable Standard rate = $12 per hour Standard labor hours for actual production = Actual production x Standard labor hour per unit = 28,300 x 1.50 = 42450 labor hours Substituting values: -5280 = 12 x (42450 - AH) -440 = 42450 - AH AH = 42450 + 440 Actual direct labor hours = 42890 hours (Answer)