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: Job Motor tune-up Standard Hours Standard Rate Standard Cost 1.80 $5.50 $9.90 The record showing the time spent in the shop last week on motor tune-ups has been misplaced. However, the shop supervisor recalls that 170 tune-ups were completed during the week, and the controller recalls the following variance data relating to tune-ups: Labor rate variance Labor $ 55 F $1.287 U spending variance hte Deiremine the number of actual labor-hours spent on tune aps durng the week 1. Determine the number of actual labor-hours spent on tune-ups during the week. Actual labor hours hours 2. Determine the actual hourly rate of pay for tune-ups last week. (Round your answer to 2 decimal places.) Actual hourly rate per hour

Explanation / Answer

For Solution Key is find the labour efficiency variance Labour spending Variance = Labour Rate Variance+Labour Efficiency Variance Labour Efficieny Variance = Labour Spending Variance -Labour Rate Variance Labour Efficieny Variance = 1287U - 55F =1,342 F Requirement 1 Computation of Actual labour hours Labour Efficieny Variance = (Standard Hours for Actual Output - Actual Hours worked ) X Standard rate 1342 F = ((170x1.8) -AH) X 5.5 -1342 /5.5 = 306-AH AH =306+244 AH =550 hours Requirement 2 Computation of Actual hourly rate Labour Rate Variance = (Standard rate - Actual rate) X Actual Hours 55 F = (5.5 -AR)X 550 55/550 =5.5 -AR 0.1 =5.5-AR AR =5.4 per Hour

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

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