Sheldon Company Manufactures Only One Product and Uses a Standard

Multiple Choice

Sheldon Company manufactures only one product and uses a standard cost system. During the past month, manufacturing operations for the company had the following variances: direct labor rate variance = $30,000 favorable; direct labor efficiency variance = $50,000 unfavorable. Sheldon allows 5 standard direct labor hours per unit produced, and its standard direct labor hourly pay rate is $50. During the month, the company used 25% more direct labor hours than the standard allowed.

What were the total standard hours allowed (SQ) for the units manufactured during the month, rounded to the nearest whole number?

A) 1,000.
B) 2,500.
C) 4,000.
D) 5,000.
E) 6,000.