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

Question

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:

The record showing the time spent in the shop last week on motor tune-ups has been misplaced. However, the shop supervisor recalls that 230 tune-ups were completed during the week, and the controller recalls the following variance data relating to tune-ups:

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

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:

Explanation / Answer

Given Data Standard Hours 345 230*1.5 Standard Rate 6.2 Actual Hours ??? Actual Rate ??? Computation of Labor Efficiency Variance Labour Spending Variance = Labour rate variance + Labour Efficiency Variance 829 U = 318 F + Labour Efficiency Variance Labour Efficency Variance = -829 -318 Labour Efficency Variance = -829 -318 Labour Efficency Variance = - 1147 Labour Efficency Variance = 1147 U Answer to Part 1 Labor Efficiency Variance Standard Rate *(Standard Hours - Actual hours) 1147 U 6.2*(345 - Actual Hours) -1147 6.2*(345 - Actual Hours) -1147/6.2 (345 - Actual Hours) -185.00 (345 - Actual Hours) Actual Hours 345+185 Actual Hours 530 Answer to Part 2 Labor Rate Variance Actual Hours *(Standard Rate - Actual Rate) Labor Rate Variance Actual Hours *(Standard Rate - Actual Rate) 318 F 530 *(6.2 - Actual Rate) 318 530*(6.2 - Actual Rate) 318/530 6.2 - Actual Rate 0.6 6.2 - Actual Rate Actual Rate 6.2-0.6 Actual Rate 5.60

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.