Bear Company
Bear Company uses a standard costing system. The following information pertains to direct labour costs for the month of March: $$\begin{array} { l l }
\text { Standard direct labour rate per hour } & \$ 15.00 \
\text { Actual direct labour rate per hour } & \$ 13.50 \
\text { Labour rate variance } & \$ 18,000 \text { fav ourable } \
\text { Actual output } & 1,000 \text { units } \
\text { Standard hours allowed for actual production } & 10,000 \text { hours }
\end{array}$$
-Refer to Bear Company. How many actual labour hours were worked during March?

Question

Bear Company
Bear Company uses a standard costing system. The following information pertains to direct labour costs for the month of March: $$\begin{array} { l l } 
\text { Standard direct labour rate per hour } & \$ 15.00 \
\text { Actual direct labour rate per hour } & \$ 13.50 \
\text { Labour rate variance } & \$ 18,000 \text { fav ourable } \
\text { Actual output } & 1,000 \text { units } \
\text { Standard hours allowed for actual production } & 10,000 \text { hours }
\end{array}$$
-Refer to Bear Company. How many actual labour hours were worked during March?

Quizplus · Accepted Answer

The labor rate variance is calculated as (Standard Rate - Actual Rate) x Actual Hours. Given a favorable variance of $18,000, we can set up the equation: ($15.00 - $13.50) x Actual Hours = $18,000. Solving for Actual Hours gives 12,000 hours.

Bear Company Bear Company Uses a Standard Costing System -Refer to Bear Company

Bear Company
Bear Company Uses a Standard Costing System -Refer to Bear Company