The Actual Cost of Direct Labor Per Hour Is $14

question 157

Multiple Choice

The actual cost of direct labor per hour is $14.75.Two and one half standard direct labor hours are allowed per unit of finished goods.During the current period,2,700 units were produced using 6,500 direct labor hours.The direct labor efficiency variance is $2,500 favorable.Calculate the standard direct labor rate per hour.

• A)$14.75
• B)$10.00
• C)$36.88
• D)$10.80

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Definitions:

Research and Development

The investigative activities a business conducts to improve existing products and procedures or to lead to the development of new products and procedures.

Fixed Asset Turnover Ratio

A performance metric that evaluates how efficiently a company is using its fixed assets to generate sales.

Net Operating Income

The profit realized from a business's operations after subtracting operating expenses from revenue.

Denominator

The bottom number in a fraction which indicates how many equal parts the whole is divided into.