Expected, Standard, and Actual Labor Hours The Pizza Company makes two types of

Question

Expected, Standard, and Actual Labor Hours

The Pizza Company makes two types of frozen pizzas: pepperoni and cheese. The Pizza Company allocates overhead to these two products based on the number of direct labor hours. The direct labor hours per unit for making a pepperoni pizza is 5 minutes or 1/12 of an hour. The direct labor hours per unit for making a cheese pizza is 4 minutes or 1/15 of an hour. At the start of the year the Pizza Company expected to make 12,000 pepperoni pizzas and 6,000 cheese pizzas. During the year, the Pizza Company actually made 9,000 pepperoni pizzas and 7,500 cheese pizzas. The time cards indicate that direct laborers worked for 1,300 hours. What are the total expected direct labor hours, standard direct labor hours, and actual direct labor hours?

Explanation / Answer

Expected Direct Labour Hours:-

Co.Expected 12000 Pepporoni pizza which reqd 12000/12=1000 Labour Hours

Co. Expected 6000 cheese pizza which required 6000/15=400 Labour Hours

Total expected Labour Hours =1000+400=1400Labour hours

Standard Labour Hours for making 9000 pepperoni pizzas=9000/12=750 hours

Standard Labour Hours for making 7500cheese pizzas

7500/15=500hours

Total standard Labour Hours=750+500=1250 hours

Actual direct Labour Hours taken from time card =1300hours

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