Hart Company's labor standards call for 500 direct labor-hours to produce 250 units of product. During October the company worked 625 direct labor-hours and produced 300 units. The standard hours allowed for October would be:
A) 625 hours
B) 500 hours
C) 600 hours
D) 250 hours

Question

Quizplus · Accepted Answer

The standard hours allowed refers to the number of labor hours that should have been used to produce the actual output. Based on Hart Company's labor standards, 500 direct labor-hours should have been used to produce 250 units of product, which translates to 2 hours per unit (500/250=2).
To determine the standard hours allowed for October, we need to calculate how many hours should have been used to produce the actual output of 300 units. 300 units x 2 hours per unit = 600 hours.
Therefore, the standard hours allowed for October would be 600 hours.

Hart Company's Labor Standards Call for 500 Direct Labor-Hours to Produce