Job Motor tune-up Standard Standard Standard Rate $6.00 Hours 1.50 Cost $9.00 Th

Question

Job Motor tune-up Standard Standard Standard Rate $6.00 Hours 1.50 Cost $9.00 The record showing the time spent in the shop last week on motor tune-ups has been misplaced. However, the shop supervisor recalls that 150 tune-ups were completed during the week, and the controller recalls the following variance data relating to tune-ups: Labor rate variance Labor spending variance$1,296 $ 294 F Required: 1. Determine the number of actual labor-hours spent on tune-ups during the week. Act tual 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

Labor efficiency variance = Labor spending variance -Labor rate variance

     = 1296-(-294)

     = 1296 +294

        = 1590 U

A)Labor efficiency variance =SR[AH-SH]

1590 =6[AH- (150*1.5)]

1590/6 =[AH- 225]

    265+225 =AH

Actual hours = 490 hours

b)Labor rate variance =AH[AR-SR]

-294 = 490[AR-6]

-294/490 =AR-6

   -.60 =AR-6

   AR = -.60+6

         = $ 5.4 per hour

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