During the current month,Thompson Company started 40,000 units of product and transferred 25,000 fully completed units to finished goods.The final work in process inventory was 50 percent complete as to labor operations.There was no initial work in process,and actual labor hours were 150,000 for the period.Each unit should have required 3 direct labor hours to be produced at standard.The total standard hours allowed for the period are
A)75,000 hours.
B)97,500 hours.
C)120,000 hours.
D)150,000 hours.

Question

Quizplus · Accepted Answer

The total standard hours allowed for the period is 97,500 hours. This is calculated as follows:Standard hours allowed = (Units started + Units in ending WIP) * Standard hours per unit= (40,000 + 50% of 25,000) * 3= (40,000 + 12,500) * 3= 52,500 * 3= 97,500 hours

During the Current Month,Thompson Company Started 40,000 Units of Product