Majenta Company uses a standard costing system. The following information pertains to direct labor costs for February: Standard direct labor rate per hour $12.00 Actual direct labor rate per hour $10.00 Labor rate variance $15000 F Actual output 1,200 units Standard hours allowed for actual production 13,000 hours How many actual labor hours were worked during February for Majenta Company? a. 7,500 hours b. 4,200 hours c. 6,300 hours d. 9,000 hours

Question

Business

Lane Glenn

25 October, 23:02

Majenta Company uses a standard costing system. The following information pertains to direct labor costs for February: Standard direct labor rate per hour $12.00 Actual direct labor rate per hour $10.00 Labor rate variance $15000 F Actual output 1,200 units Standard hours allowed for actual production 13,000 hours How many actual labor hours were worked during February for Majenta Company? a. 7,500 hours b. 4,200 hours c. 6,300 hours d. 9,000 hours

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Kenna · Answer 1

Option a 7500 hours.

Explanation:

Given that Majenta Company uses a standard costing system. The following information pertains to direct labor costs for February:

Labour rate variance = Actual hours x actual rate - actual hours x std rate

Here we have actual rate = 10 and std rate = 12

So Labour rate variance = Actual hours (10-12) = 15000 F

This gives

actual hours = 15000/2 = 7500 hours

So option a