Claire Company uses a standard costing system.The following information pertains to direct labour costs for the month of February: $\begin{array}{ll}
\text { Standard direct labour rate per hour } & \$ 15.00 \
\text { Actual direct labour rate per hour } & \$ 13.50 \
\text { Labour rate variance } & \$ 18,000 \text { favourable } \
\text { Actual output } & 1,000 \text { units } \
\text { Standard hours allowed for actual production } & 10,000 \text { hours }
\end{array}$
-How many actual labour hours were worked during February for Claire Company?
A)1,200
B)2,000
C)10,000
D)12,000

Question

Claire Company uses a standard costing system.The following information pertains to direct labour costs for the month of February: $\begin{array}{ll}
\text { Standard direct labour rate per hour } & \$ 15.00 \
\text { Actual direct labour rate per hour } & \$ 13.50 \
\text { Labour rate variance } & \$ 18,000 \text { favourable } \
\text { Actual output } & 1,000 \text { units } \
\text { Standard hours allowed for actual production } & 10,000 \text { hours }
\end{array}$ 
-How many actual labour hours were worked during February for Claire Company?
A)1,200
B)2,000
C)10,000
D)12,000

Quizplus · Accepted Answer

The labour rate variance is calculated as (Standard Rate - Actual Rate) * Actual Hours Worked. Given a favourable variance of $18,000 and the rates provided, we can solve for the actual hours worked: $18,000 = ($15.00 - $13.50) * Actual Hours Worked. Solving this equation gives us 12,000 actual hours worked.

Claire Company Uses a Standard Costing System -How Many Actual Labour Hours Were Worked During February for to Direct