Question

He 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 Standard Rate Standard CostMotor tune-up 2.50 $33.00 $82.50The record showing the time spent in the shop last week on motor tune-ups has been misplaced. However, the shop supervisor recalls that 58 tune-ups were completed during the week, and the controller recalls the following variance data relating to tune-ups:Labor rate variance $ 80 FLabor spending variance $ 118 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.)

Answer 1

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

The standard labor cost for a motor tune-up is given below:

Standard Hours= 2.5

Standard Rate= $33

Standard Cost Motor tune-up= 82.5

The shop supervisor recalls that 58 tune-ups were completed during the week, and the controller recalls the following variance data relating to tune-ups:

Labor rate variance $ 80 F

Labor spending variance $ 118 U

1) Direct labor efficiency variance= (SQ - AQ)*standard rate

Direct labor efficiency variance= (58*2.5  - actual quantity)*33

118= (145 - AQ)*33

118= 4,785 - 33AQ

-4,667= -33AQ

141.42= Actual Quantity

2) Direct labor price variance= (SR - AR)*AQ

80= (2.5 - Actual rate)*141.42

-273.55= -141.42AR

1.92= Actual rate