Problem 23-4A (Part Level Submission) Kansas Company uses a standard cost accoun

Question

Problem 23-4A (Part Level Submission) Kansas Company uses a standard cost accounting system. In 2017, the company produced 28,000 units. Each unit took several pounds of direct materials and 1.6 standard hours of direct labor at a standard hourly rate of $12.00. Normal capacity was 50,000 direct labor hours. During the year, 117,000 pounds of raw materials were purchased at $0.92 per pound. All materials purchased were used during the year.

If the labor quantity variance was $7,200 unfavorable, what were the actual direct labor hours worked?

Explanation / Answer

Labor Quantity Variance = ( Standard hours allowed for Actual Output - Actual Hours Worked) x Standard Labor Hour Rate = ( 28,000 x 1.60 - Actual Hours Worked) x $ 12.00 = $ 537,600 - $ 12 x Actual Hours Worked = - 7,200

Actual Hours Worked = $ ( 537,600 + 7,200) / $ 12 = 45,400 hours

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