Fundamentals of Cost Accounting 3rd Edition by William N. Lanen, Shannon W. Anderson, Michael Maher

Exercise 50

Solve for Direct Labor-Hours

Thomas Company reports the following direct labor information for one of its products for April:

Standard rate	$21.00	per hour
Actual rate paid	$21.60	per hour
Standard hours allowed for actual production	5,600	hours
Labor efficiency variance	$16,800	F

Required

Based on these data, what was the number of actual hours worked and what was the labor price variance?

Step 1 of 3

Cost accounting

This system is designed for inhouse or internal managers and their decision making. Cost accounting information is not needed for comparison with other companies. This information is commonly used in financial accounting also, but it is primarily used by company managers for their decision making. It is important that cost accounting information is relevant for the decision making of the manager.