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8 August, 20:18

He auto repair shop of Quality Motor Company uses standards to control the labor time and labor cost in the shop. The standard labor cost for a motor tune-up is given below:Standard Hours Standard Rate Standard CostMotor tune-up 2.50 $33.00 $82.50The record showing the time spent in the shop last week on motor tune-ups has been misplaced. However, the shop supervisor recalls that 58 tune-ups were completed during the week, and the controller recalls the following variance data relating to tune-ups:Labor rate variance $ 80 FLabor spending variance $ 118 U

Required:

1. Determine the number of actual labor-hours spent on tune-ups during the week.

2. Determine the actual hourly rate of pay for tune-ups last week. (Round your answer to 2 decimal places.)

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Answers (1)
  1. 8 August, 20:30
    0
    Instructions are listed below.

    Explanation:

    Giving the following information:

    The standard labor cost for a motor tune-up is given below:

    Standard Hours = 2.5

    Standard Rate = $33

    Standard Cost Motor tune-up = 82.5

    The shop supervisor recalls that 58 tune-ups were completed during the week, and the controller recalls the following variance data relating to tune-ups:

    Labor rate variance $ 80 F

    Labor spending variance $ 118 U

    1) Direct labor efficiency variance = (SQ - AQ) * standard rate

    Direct labor efficiency variance = (58*2.5 - actual quantity) * 33

    118 = (145 - AQ) * 33

    118 = 4,785 - 33AQ

    -4,667 = - 33AQ

    141.42 = Actual Quantity

    2) Direct labor price variance = (SR - AR) * AQ

    80 = (2.5 - Actual rate) * 141.42

    -273.55 = - 141.42AR

    1.92 = Actual rate
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