Question

Fueled by Caffeine Company is a manufacturer of travel mugs. Fueled has recently experienced turnover in its accounting department and is unable to find documentation of the prior period standard rate per direct labor hour. The company needs this information to begin the budgeting process for the next period. Fueled has determined that the total direct labor variance in the prior period was a favorable​ $390 and that direct laborers were paid​ $0.50 less per hour than expected. Management expected​ 5,200 direct labor hours to be logged during production based on the actual number of travel mugs​ produced; however, 260 more actual direct labor hours were logged during production. What was the prior​ period’s actual direct labor rate per​ hour?

A.

​$10.50 per direct labor hour

B.

​$8.50 per direct labor hour

C.

​$8.00 per direct labor hour

D.

​$12.00 per direct labor hour

E.

​$9.00 per direct labor hour

Answer 1