Krizun Industries makes heavy construction equipment. The standard for a particular crane calls for 20 direct labor-hours at $16 per direct labor-hour. During a recent period1,300 cranes were made. The labor efficiency variance was $5,200 Unfavorable. How many actual direct labor-hours were worked?

Question

Quizplus · Accepted Answer

Labor efficiency variance = (Standard hours for actual output - Actual hours worked) x standard labor rate.

Given:
Standard hours per unit = 20 hours
Standard labor rate = $16 per hour
Total output = 1,300 units
Labor efficiency variance = $5,200 unfavorable

Let Actual hours worked be X

$5,200 = (20 x 1,300 - X) x $16
$5,200 = (26,000 - X) x $16
$5,200/$16 = 325 = 26,000 - X
X = 26,000 - 325
X = 25,675 hours

Therefore, the actual direct labor-hours worked were 26,325 hours (Option C)

Krizun Industries Makes Heavy Construction Equipment