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25 September, 11:14

Jackson Company uses a standard cost system. The following information pertains to direct labor for product B for the month of October: Standard hours allowed for actual production 2,550 Actual rate paid per hour $ 8.50 Standard rate per hour $ 8.10 Labor efficiency variance $ 1,215 U What were the actual hours worked for the month of October?

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  1. 25 September, 12:43
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    Answer: 2400 hours

    Explanation: Labor efficiency variance can be computed using following formula : -

    Labor efficiency variance = standard rate (standard hours - actual hours)

    so, putting the values into equation we get : -

    -$1215 = $8.10 (2,550 hours - actual hours)

    -$150 = 2,550 hours - actual hours

    actual hours = 2400 hours
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