Cintron Company produces high-quality leather belts. The Boise plant uses a stan

Question

Cintron Company produces high-quality leather belts. The Boise plant uses a standard costing system with the following standards for materials (leather strips) and direct labor.

There are no beginning or ending inventories for direct materials.

For direct labor, what is the standard quantity allowed?

Standard Price Standard Usage Leather Strips (Direct Materials) $ 4 5 strips Direct Labor $ 0.75 9 hours July Data Number of Belts Produced 20,891 Number of Leather Strips Purchased 113,061 Number of Labor Hours Used 223,340 Actuals Cost per Leather Strip $ 2 Actual Cost per Labor Hour $ 10

Explanation / Answer

Standard quantity allowed for direct labour will be the standard hours required to produce actual units.

Actual units are 20,891 and hours required to produce one belt is 9 hours.

So total standard hours required to produce actual units will be 20,891*9 = 188,019 hours.

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