Question

During a period 17, 500 labour hours were worked at a standard cost of rs 6.50 per hour. The labour efficiency variance was rs 7,800 favourable. How many standard hours were produced?

Answer 1

Given :-

• During a period 17, 500 labour hours were worked at a standard cost of rs 6.50 per hour. .
• The labour efficiency variance was rs 7,800 favourable .

To Find :-

• How many standard hours were produced ?

Solution :-

we know that,

• Labour Efficiency Variance = (Standard Hours - Actual Hours) * (standard labour rate per hour.)

Given values are :-

• Labour Efficiency Variance = 7800.
• Actual hours = 17500.
• standard labour rate per hour = 6.5

Putting all values we get,

→ 7800 = ( Standard hours - 17500) * 6.5

Dividing both sides by 6.5 ,

→ 1200 = Standard hours - 17500

→ Standard hours = 1200 + 17500

→ Standard hours = 18,700 (Ans.)

Hence, 18,700 standard hours were produced .