The Fime Corporation uses a standard costing system.The following data have been assembled for December:
The standard hours allowed for December's production is:
A) 5,900 hours
B) 6,500 hours
C) 6,200 hours
D) 6,000 hours

Question

The Fime Corporation uses a standard costing system.The following data have been assembled for December:
 The standard hours allowed for December's production is:
A) 5,900 hours 
B) 6,500 hours 
C) 6,200 hours 
D) 6,000 hours

Quizplus · Accepted Answer

Labor efficiency variance = (AH - SH) × SR
$2,100 U = (6,200 hours - SH) × $7 per hour
$2,100 = (6,200 hours - SH) × $7 per hour
$2,100 = $43,400 - (SH × $7 per hour)
SH × $7 per hour = $43,400 - $2,100
SH × $7 per hour = $41,300
SH = $41,300 ÷ $7 per hour
SH = 5,900 hours

The Fime Corporation Uses a Standard Costing System