Allan Company
Allan Company manufactures overalls. During the year, it manufactured 125,000 overalls, using 2.9 hours of direct labour per unit at a rate of $6.25 per hour. The materials and labour standards for manufacturing the overalls are as follows: $\begin{array}{lll}
\text {Direct materials ( $ 5 \mathrm{~m} $ of denim $ @ \$ 2 $ per metre) }&\$10\
\text {Direct labour (3 hours $ @ \$ 6 $ per }&18\
\end{array}$
The company required 600,000 m at $1.95 per metre to make the 125,000 overalls.There were no beginning or ending inventories.
-Refer to AirSoar Company. What was the actual cost per labour hour?
A) $11.25
B) $11.50
C) $12.50
D) $12.75

Question

Allan Company
Allan Company manufactures overalls. During the year, it manufactured 125,000 overalls, using 2.9 hours of direct labour per unit at a rate of $6.25 per hour. The materials and labour standards for manufacturing the overalls are as follows: $\begin{array}{lll}
\text {Direct materials ( $ 5 \mathrm{~m} $ of denim $ @ \$ 2 $ per metre) }&\$10\
\text {Direct labour (3 hours $ @ \$ 6 $ per  }&18\
\end{array}$
 The company required 600,000 m at $1.95 per metre to make the 125,000 overalls.There were no beginning or ending inventories.
-Refer to AirSoar Company. What was the actual cost per labour hour?
A) $11.25
B) $11.50
C) $12.50
D) $12.75

Quizplus · Accepted Answer

Actual labour cost = 125,000 units x 2.9 hours per unit x $6.25 per hour = $2,031,250Actual labour hours = 125,000 units x 2.9 hours per unit = 362,500 hoursActual cost per labour hour = $2,031,250 / 362,500 hours = $11.25

Allan Company Allan Company Manufactures Overalls The Company Required 600,000 M at $1

Allan Company
Allan Company Manufactures Overalls The Company Required 600,000 M at $1