The auto repair shop of in the shop. The standard labor cost for a motor tune-up

Question

The auto repair shop of in the shop. The standard labor cost for a motor tune-up is given below Quality Motor Company uses standards to control the labor time and labor cost Job Standard Hours Standard Rate Standard Cost Motor tune-up 2.5 $9.00 $22.50 been misplaced The record showing the time spend in the shop last week on motor tune-ups has However, the shop supervisor recalls that 50 tune-ups were completed during the week, and the controller recalls the following variance data relating to tune-ups. $87 F Labor rate Variance Total Labor Variance Required $93 U Determine the number of actual labor-hours spent on tune ups during the week. 1. 2. Hint: A useful way to proceed would be to work from known to unknown data either by using the variance formulas or by using the columnar format that we have used in class. Determine the actual hourly rate of pay for tune-ups last week.

Explanation / Answer

Labour efficiency variance = 87+93 = 180 U

Labour efficiency variance = (Standard hour-actual hour)Standard rate

-180 = (50*2.5*9-9X)

-180 = 1125-9X

9X = 1305

X(actual hour) = 145 Hour

Labour rate variance = (Standard rate-actual rate)actual hour

87 = (9*145-145X)

145X = 1218

X(actual hourly rate) = 8.40 per hour

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