The auto repair shop of Quality Motor Company uses standards to control the labo

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: The record showing the time spent in the shop last week on motor tune-ups has been misplaced. However, the shop supervisor recalls that 160 tune-ups were completed during the week, and the controller recalls the following variance data relating to tune-ups: Determine the number of actual labor-hours spent on tune-ups during the week. Determine the actual hourly rate of pay for tune-ups last week.

Explanation / Answer

Ans-

no of tune-ups completed 160

Standand hour(160*2.5)400 hrs

456 U=(Actual hour-400hrs)*4.5

Actual hour =299 hrs

Labour rate variance=(actual rate-standand rate)*actual hour worked

                       141U =(Actual rate-4.5)*299

            Actual rate=$4.03

1)Actual hour hours 299hrs

2)Actual hour rate $4.03            

Standand hrs Standand rate Standand cost Motor tune up 2.5 $4.5 $11.25

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