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: Standard Hours 2.50 Standard Rate $36.00 Standard Cost $90.00 Motor tune-up The record showing the time spent in the shop last week on motor tune-ups has been misplaced. However, the shop supervisor recalls that 56 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 $ 400 F $ 500 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.) hours 1. Actual labor hours 2. Actual hourly rate per hour

Answer 1

Solution Labor Rale Vaiconce Laber eiciency Vatonce Labe pending Variance 500 U L00F 1 - Lt400) -oo 400 - 50o eo o U AH)X Standol Aale phour Labosctenay Vaetance(Standand hry SH- ( 56 tone ups X 2.50 SHs AH)X 36 40- AH) x 36 -900 10 0/ 3 AH 40 25 l40 AlH

AH 140t 25 AH 165 Actval Lober hours 165 houu

ketAchval houry rute be AR Actual houy Actval Rate Lob Rale vonionce =stondard Rale [ 36 AR Y165 hours 400 F = AR)165 400 165 36 AR 36 AR 2.4 - 2.4 AR =36 houn AR 33.6o ActolhouRate = 32«60 per haun