Piper Corporation's standards call for 3,900 direct labor-hours to produce 1,300 units of product. During October the company worked 1,200 direct labor-hours and produced 1,200 units. The standard hours allowed for October would be:

a. 3,900 hours

b. 1,200 hours

c. 3,600 hours

d. 2,700 hours

The correct answer is C.

Explanation:

Giving the following information:

Piper Corporation's standards call for 3,900 direct labor-hours to produce 1,300 units of product. During October the company worked 1,200 direct labor-hours and produced 1,200 units.

The standard hour allowed is the number of hours that takes to produce a certain number of units.

First, we need to determine the standard hours per unit:

Standard hour per unit = 3,900/1,300 = 3 hours per unit

Now, for 1,200 units:

Standard hours allowed = 1,200*3 = 3,600 hours