Assume the following information appears in the standard cost card for a company that makes only one product:

	Standard Quantity or Hours		Standard Price or Rate			Standard Cost
Direct materials	5	pounds	$	11.00	per pound	$	55.00
Direct labor	2	hours	$	17.00	per hour	$	34.00
Variable manufacturing overhead	2	hours	$	3.00	per hour	$	6.00

During the most recent period, the following additional information was available:

• 20,000 pounds of material was purchased at a cost of $10.50 per pound.
• 8,000 direct labor-hours were recorded at a total cost of $132,000.
• The direct labor efficiency variance is $3,400 U.

What is the standard quantity of labor hours allowed for the actual level of output?

Garrison 17e Rechecks 2020-09-29

Multiple Choice

• 7,800 hours

• 8,200 hours

• 8,000 hours

• 7,600 hours