The Baby Clothing Company Makes a Single Product and Uses

Multiple Choice

The Baby Clothing Company makes a single product and uses standard costing. Some data concerning this product for the month of May follow:

$\begin{array} { | l | r | } \hline \text { Labour rate variance } & \$ 7,500 \text { favourable } \\\hline \text { Labour efficiency variance } & \$ 12,000 \text { favourable } \\\hline \text { Variable overhead efficiency variance } & \$ 5,000 \text { favourable } \\\hline \text { Number of units produced } & 10,000 \\\hline \text { Standard labour rate per direct labour hour } & \$ 12 \\\hline \text { Standard variable overhead rate per direct labour hour } & \$ 5 \\\hline \text { Actual labour hours used } & 15,000 \\\hline \text { Actual variable manufacturing overhead costs } & \$ 78,290 \\\hline\end{array}$
-What are the standard hours allowed to make one unit of finished product?

A) 1.0 hours.
B) 1.2 hours.
C) 1.6 hours.
D) 2.0 hours.