5 The auto repair shop of Quality Motor Company uses standards to control the la

Question

5 The 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 1.80 Standard Rate Standard Cost Motor tune-up $5.50 $9.90 2 04:51:42 The record showing the time spent in the shop last week on motor tune-ups has been misplaced. However, the shop supervisor recalls the controller recalls the following variance data relating to tune-ups: Labor rate variance Labor spending variance $ 663 F $ 459 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.) es hours 2 Actual hourly rate per hour

Explanation / Answer

Labour efficiency variance = 663 F+459 U = 1122 U

Labour efficiency variance = (Standard hour-actual hour)Standard rate

-1122 = (170*1.8*5.50-5.50X)

5.50X = 2805

X(actual hour) = 510 hour

Labour price variance = (Standard rate-actual rate)actual hour

663 = (5.50*510-510X)

510X = 2142

X(actual hours) = 4.20 per hour

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