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.)

Question

Business

Markus

15 November, 22:08

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.)

+3

Answers (1)

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Domino · Answer 1

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