Montana Company uses a standard costing system. The following information pertains to direct labor costs for the month of February: How many actual labor hours were worked during February for Montana Company?
A) 10,000
B) 12,000
C) 1,200
D) 2,000

Question

Montana Company uses a standard costing system. The following information pertains to direct labor costs for the month of February:  How many actual labor hours were worked during February for Montana Company?
A) 10,000 
B) 12,000 
C) 1,200 
D) 2,000

Quizplus · Accepted Answer

The total actual labor cost is calculated by multiplying the actual labor rate of $20 per hour by the actual labor hours. The total actual labor cost for February is $240,000, and the actual labor rate is $20 per hour, so the actual labor hours worked must be 12,000 hours ($240,000 divided by $20 per hour). Therefore, the correct answer is B.

Montana Company Uses a Standard Costing System