I have been doing questions from a source and was asked the calculate the Standard labour hours per unit. I have been studying from the questions here, and Standard labor hours means, budgeted hour for 1 unit multiply by actual number of units produced. I know for a fact I am right, but still need a second opinion. The question is below as follows:
In a period, 6,500 units were made. There was an adverse labour efficiency variance of $26,000. Workers were paid at $8 per hour which was equal to the standard labour rate. Total wages were $182,000. Calculate the standard labour hours per unit.
Here's my solution:
6500 units should take: (182000-26000)/8 = 19500 hours
therefore, standard hours per unit= 19500/6500= 3 hours.
But in the source I am doing from, the answer is 3.5 and here's how they have shown the solution:
6500 units shd take 19500 (3hrs)
6500 units did take 22750 #
difference 3250 (A) @ $8 = 26000 (A)
22750 hrs / 6500 units = $3.50.
Any help is appreciated. Thank You.
