Question

Excel Co. has collected the following data for April: Budgeted direct labor: 3 hours per unit...

Excel Co. has collected the following data for April:

Budgeted direct labor: 3 hours per unit at $6 per hour
Direct labor efficiency variance: $1,200 (U)
Actual direct labor cost: $28,900
Units produced: 1,600

Determine the actual number of direct labor hours worked in April?

Please kindly explain how you arrived at your answer step by step so I can understand better. Thank you

Business   Accounting   
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Homework Answers

Answer #1

Actual labor hours= 5000 hours

Working

LEV= (SH-AH) x SR

-1200= (4800-AH) x 6

-1200/6= (4800-AH)

-200= (4800-AH)

AH= 4800+200

AH= 5000 hours

Labour Efficiency Variance

(

Standard Hours

-

Actual Hours

)

x

Standard Rate

(

4800

-

5000

)

x

$       6.00

-1200

Variance

$        1,200.00

Unfavourable-U

Standard DATA for

1600

Units

Quantity (SQ)

Rate (SR)

Standard Cost

[A]

[B]

[A x B]

Direct labor

( 3 hours x 1600 Units)=4800 hours

$              6.00

$        28,800.00
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