Lacrue Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours. The actual output for the period was 3,700 units.
The standard hours allowed for the actual output is closest to:
A) 1,480 hours
B) 1,580 hours
C) 1,520 hours
D) 1,538 hours

Question

Lacrue Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours.  The actual output for the period was 3,700 units.
The standard hours allowed for the actual output is closest to:
A) 1,480 hours 
B) 1,580 hours 
C) 1,520 hours 
D) 1,538 hours

Quizplus · Accepted Answer

SH = 3,700 units × 0.40 hours per unit = 1,480 hours