Sheldon Company Manufactures Only One Product and Uses a Standard

question 54

Multiple Choice

Sheldon Company manufactures only one product and uses a standard cost system. During the past month, manufacturing operations for the company had the following variances: direct labor rate variance = $30,000 favorable; direct labor efficiency variance = $50,000 unfavorable. Sheldon allows 5 standard direct labor hours per unit produced, and its standard direct labor hourly pay rate is $50. During the month, the company used 25% more direct labor hours than the standard allowed.
What was the actual hourly rate (AP) for direct labor, rounded to two decimal places?

• A) $30.00.
• B) $36.00.
• C) $44.00.
• D) $50.00.
• E) $56.00.