Krizun Industries makes heavy construction equipment. The standard for a particular crane calls for 20 direct labor-hours at $16 per direct labor-hour. During a recent period 1,300 cranes were made. The labor efficiency variance was $5,200 Unfavorable. How many actual direct labor-hours were worked

Answer: 26,325 hrs

Explanation:

We will use the Labor Efficiency Variance concept to calculate this question.

The formula for which is,

Labour Efficiency Variance = (Standard Direct Labour Hours allowed - Actual Direct Labour hours used) * Std Direct Labour Rate

where,

the Standard Direct Labour Hours allowed = Actual units produced * Standard Direct Labour Hours

Substituting figures that would be,

= 1300 x 20 = 26,000hrs

We have the Standard direct labor rate at $16

The Labor Efficiency Variance is 5,200 unfavourable meaning that it is negative = - 5,200

Since we are solving for Actual Direct Labour hours used we will denote it, x

Substituting figures we have

-5200 = (26,000 - x) * 16

-5200 = 416,000 - 16x

16x = 416,000 + 5200

16x = 421,200

x = 26,325

The means that the Actual Direct Labour hours used was 26,325.

26,325 hours

Explanation:

Labor efficiency variance = (AH - SH) * SR

$5,200U = [AH - (1,300cranes * 20hours per crane) ] * $16 per hour

$5,200 = [AH - (1,300cranes * 20 hours per crane) ] * $16 per hour

$5,200 = [AH - (26,000 hours) ] * $16 per hour

$5,200 = (AH * $16 per hour) - $416,000

AH * $16 per hour = $416,000 + $5,200

AH * $16 per hour = $421,200

AH = $421,200 : $16 per hourAH = 26,325hours

Therefore 26,325 actual direct labor-hours were worked.