Exercise 11-4 Monte Services, Inc. is trying to establish the standard labor cos

Question

Exercise 11-4 Monte Services, Inc. is trying to establish the standard labor cost of a typical brake repair. The following data have been collected from time and motion studies conducted over the past month. Actual time spent on the brake repairs 1.0 hour Hourly wage rate $12 Payroll taxes 10% of wage rate Setup and downtime 20% of actual labor time Cleanup and rest periods 30% of actual labor time Fringe benefits 25% of wage rate Correct answer. Your answer is correct. Determine the standard direct labor hours per brake repairs. (Round answer to 2 decimal places, e.g. 1.25.) Standard direct labor hours per brake repair Entry field with correct answer hours Show Solution Link to Text Link to Text Correct answer. Your answer is correct. Determine the standard direct labor hourly rate. (Round answer to 2 decimal places, e.g. 1.25.) Standard direct labor hourly rate $ Entry field with correct answer Show Solution Link to Text Link to Text Incorrect answer. Your answer is incorrect. Try again. Determine the standard direct labor cost per brake repair. (Round answer to 2 decimal places, e.g. 1.25.)

Standard direct labor cost per brake repair $ ???

If a brake repair took 1.6 hours at the standard hourly rate, what was the direct labor quantity variance? (Round answer to 2 decimal places, e.g. 1.25.) Direct labor quantity variance $ ???

Explanation / Answer

Standard direct labor hours per brake repair = 1.00 + ( 20% + 30%) = 1.50 hours

Standard direct labor hourly rate = $ 12 + ( 10 % + 25% ) = $ 16.20

Standard direct labor cost per brake repair = $ 16.20 x 1.50 hours = $ 24.30

If a brake repair took 1.6 hours, direct labor quantity variance = ( 1.50 - 1.60) x $ 16.20 = $ 1.62 Unfavorable.

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