The auto repair shop of Quality Motor Company uses standards trho control the la

Question

The auto repair shop of Quality Motor Company uses standards trho control the labor lime and labor cost in the shop. The standard labor cost for a motor tune up is given below: The record showing the t*ne spent in the shop last week on motor tune ups has been misplaced. 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 Required: 1 Determine the number of actual-labor hours spent on tune ups during the week 2 Detormme the actual hourly rato ot pay lor tune-ups last week.

Explanation / Answer

(Actual rate - Standard rate) x Actual hours worked = Labor rate variance 87=(AR-9)* 135.33 AR= 9.65 (Actual hours - Standard hours) x Standard rate = Labor efficiency variance 93=(a.hrs-2.5*50)*9 10.33= a.hrs-125 Actual hrs= 125+10.33 135.33

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