Blue Corporation's standards call for 2,500 direct labor-hours to produce 1,000 units of product. During May 900 units were produced and the company worked 2,400 direct labor-hours. The standard hours allowed for May production would be:
A)2,500 hours
B)2,400 hours
C)2,250 hours
D)1,800 hours

Question

Quizplus · Accepted Answer

To determine the standard hours allowed, we need to use the standard labor-hours per unit and multiply it by the actual number of units produced.

Standard labor-hours per unit = 2,500/1,000 = 2.5 hours per unit

Standard hours allowed for May production = 2.5 hours per unit x 900 units = 2,250 hours.

Therefore, the best choice is C, 2,250 hours.

Blue Corporation's Standards Call for 2,500 Direct Labor-Hours to Produce