The Pizza Company makes two types of frozen pizzas: pepperoni and cheese. The Pi

Question

The Pizza Company makes two types of frozen pizzas: pepperoni and cheese. The Pizza Company allocates overhead to these two products based on the number of direct labor hours. The direct labor hours per unit for making a pepperoni pizza is 5 minutes or 1/12 of an hour. The direct labor hours per unit for making a cheese pizza is 4 minutes or 1/15 of an hour. At the start of the year The Pizza Company expected to make 12,000 pepperoni pizzas and 6,000 cheese pizzas. During the year, The Pizza Company actually made 9,000 pepperoni pizzas and 7,500 cheese pizzas. The time cards indicate that direct laborers worked for 1,300 hours.
What are the total expected direct labor hours, standard direct labor hours, and actual direct labor hours?

Explanation / Answer

What are the total expected direct labor hours, standard direct labor hours, and actual direct labor hours?

Expected direct labor hours = (12,000 x 1/12) + (6,000 x 1/15)
= 1,400 hours

Standard direct labor hours = (9,000 x 1/12) + (7,500 x 1/15)
= 1,250 hours

Actual direct labor hours = Time card record = 1,300 hours

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