Standard Hours Calculation: A Source of Productivity

What are the standard hours allowed for Hart Company in October?

A. 250 hours

B. 500 hours

C. 600 hours

D. 625 hours

Answer:

The standard hours allowed for Hart Company for the month of October is 600 hours based on their labor standards and units produced.

The question refers to the standard hours, which is a measure used to determine how many hours should be used to produce a certain amount of units as per the company's labor standard. Here, Hart Company's labor standards call for 500 direct labor-hours to produce 250 units of product. During October, the company worked 625 direct labor-hours and produced 300 units.

This means, to produce 1 unit, the company needs 2 hours of labor (500 hours/250 units). Given that in October, the company produced 300 units, you multiply the labor standard per unit (which is 2 hours) by the amount of units produced (300 units). So: 2 hours/unit * 300 units = 600 hours. Therefore, the standard hours allowed for October would be 600 hours. So, the answer is C. 600 hours.

Understanding and calculating standard hours is essential for companies to optimize their productivity and resource allocation. By knowing the standard hours required to produce a certain amount of units, companies can plan their workforce and operations more effectively.