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28 February, 20:09

Krizun Industries makes heavy construction equipment. The standard for a particular crane calls for 20 direct labor-hours at $16 per direct labor-hour. During a recent period 1,300 cranes were made. The labor efficiency variance was $5,200 Unfavorable. How many actual direct labor-hours were worked

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Answers (2)
  1. 28 February, 20:24
    0
    26,325 hours

    Explanation:

    Labor efficiency variance = (AH - SH) * SR

    $5,200U = [AH - (1,300cranes * 20hours per crane) ] * $16 per hour

    $5,200 = [AH - (1,300cranes * 20 hours per crane) ] * $16 per hour

    $5,200 = [AH - (26,000 hours) ] * $16 per hour

    $5,200 = (AH * $16 per hour) - $416,000

    AH * $16 per hour = $416,000 + $5,200

    AH * $16 per hour = $421,200

    AH = $421,200 : $16 per hourAH = 26,325hours

    Therefore 26,325 actual direct labor-hours were worked.
  2. 28 February, 20:24
    0
    Answer: 26,325 hrs

    Explanation:

    We will use the Labor Efficiency Variance concept to calculate this question.

    The formula for which is,

    Labour Efficiency Variance = (Standard Direct Labour Hours allowed - Actual Direct Labour hours used) * Std Direct Labour Rate

    where,

    the Standard Direct Labour Hours allowed = Actual units produced * Standard Direct Labour Hours

    Substituting figures that would be,

    = 1300 x 20 = 26,000hrs

    We have the Standard direct labor rate at $16

    The Labor Efficiency Variance is 5,200 unfavourable meaning that it is negative = - 5,200

    Since we are solving for Actual Direct Labour hours used we will denote it, x

    Substituting figures we have

    -5200 = (26,000 - x) * 16

    -5200 = 416,000 - 16x

    16x = 416,000 + 5200

    16x = 421,200

    x = 26,325

    The means that the Actual Direct Labour hours used was 26,325.
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