The amount of direct-labor hours that should be used to produce one unit of finished goods is the:

• A. predetermined overhead rate
• B. direct-labor efficiency variance
• C. actual direct-labor hours per unit
• D. standard direct-labor hours per unit

Answer: (D)

Verified step by step guidance

1. Understand the concept of 'standard direct-labor hours per unit': This refers to the amount of direct-labor hours that are expected or budgeted to produce one unit of finished goods under normal operating conditions.
2. Differentiate between the terms provided in the problem: The 'predetermined overhead rate' is used to allocate overhead costs based on a cost driver, such as direct-labor hours or machine hours. The 'direct-labor efficiency variance' measures the difference between the actual labor hours used and the standard labor hours allowed for the actual production. The 'actual direct-labor hours per unit' refers to the labor hours actually used to produce one unit, which may differ from the standard hours.
3. Recognize that the 'standard direct-labor hours per unit' is a benchmark or expected value set during the budgeting or planning process. It is used for cost control and performance evaluation purposes.
4. Relate the concept to production planning: The standard direct-labor hours per unit are determined based on historical data, engineering studies, or industry standards to ensure efficient production and cost management.
5. Conclude that the correct answer is 'standard direct-labor hours per unit,' as it represents the planned or expected labor hours required to produce one unit of finished goods under normal conditions.