Question

Prokp Co.'s records for April disclosed the following data relating to direct labor:

Actual labor cost (payroll) for April $ 28,000

Labor rate variance $ 4,000 favorable

Labor efficiency variance $ 3,300 unfavorable

Actual direct labor hours worked (AQ) 2,000

Prokp's total standard direct labor hours allowed (SQ) for units produced in April (to nearest whole number) we

Multiple Choice

• 1,784.

• 1,794.

• 2,000.

• 2,206.

• 2,216.
  Please Show how to calculate

Answer 1

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

($4,000) = $28,000 - (2,000 * Standard rate)

2,000 * Standard rate = $32,000

Standard rate = $16

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

$3,300 = (2,000 * $16) - (Standard hours * $16)

Standard hours * $16 = 28,700

Standard hours = 1,793.75

The answer is 1,794 (rounded off)