Newtowne Bakery bakes fresh pies that are very popular with the local residents. For July, Newtowne Bakery budgeted 600 direct labor hours to produce 400 pies. In July, Newtowne Bakery actually produced 520 pies and actually used 900 direct labor hours. The standard hours allowed during July may have been closest to
A)1170.
B)600.
C)780.
D)462.

Question

Quizplus · Accepted Answer

To find the standard hours allowed, we need to first calculate the standard direct labor hours per pie.

Standard direct labor hours per pie = Budgeted direct labor hours / Budgeted number of pies 
= 600/400 
= 1.5

Then, we can use this to find the expected direct labor hours for actual production.

Expected direct labor hours = Standard direct labor hours per pie x Actual number of pies 
= 1.5 x 520 
= 780

Therefore, the standard hours allowed during July may have been closest to 780, which is option C.

Newtowne Bakery Bakes Fresh Pies That Are Very Popular with the Local