Ask Question
7 August, 06:26

Krizum industries makes heavy construction equipment. the standard for a particular crane calls for 24 direct labor-hours at $16 per direct labor-hour. during a recent period 850 cranes were made. the labor rate variance was zero and the labor efficiency variance was $8,800 unfavorable. how many actual direct labor-hours were worked?

+2
Answers (1)
  1. 7 August, 06:49
    0
    A labor rate variance equal to zero would mean that the standard labor rate is equal to the actual labor rate which is $16 per direct labor-hour. To recall, the formula for labor efficiency variance is:

    Labor efficiency variance = (AH - SH) * SR

    Where,

    AH = actual number of hours worked = unkown

    SH = standard number of hours worked = 850 cranes * 24 hours per crane = 20,400 hours

    SR = standard labor rate = $16

    Substituting the known values to the equation:

    $8,800 = [AH - 20,400 hours] * $16 per hour

    $8,800 = [AH - 20,400 hours] * $16 per hour

    $8,800 = (AH * $16 per hour) - ($326,400)

    AH * $16 per hour = $326,400 + $8,800

    AH * $16 per hour = $335,200

    AH = $335,200 / $16 per hour

    AH = 20,950 hours
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Krizum industries makes heavy construction equipment. the standard for a particular crane calls for 24 direct labor-hours at $16 per direct ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers