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. (Round your answer to 2 decimal places.)

Explanation / Answer

SRSH                                                                     SRAH                                                                     ARAH

=$4.5 x 400                                                         =$4.5 x 510                                                         = 4.8 x 510

=$1,800                                                =$2,295                                                 =$2,448

SR= Standard Rat per Labor hr=$4.50

SH= Standard hrs required for actual Production= standard hr per tune x No of unit produced

                                                                                       =2.5 x 160=400 hrs

AH= Actual Hrs worked=160 hrs

AR= Actual Rate per labor hr

                                               =1,800-ARAH=-$618

                                               =ARAH= 1800+618

                                                ARAH=$2,448

             =4.5 AH- $2,448 = -153

             =4.5 AH= -153+2,448

              AH=2,295/4.5

              AH=510 hrs

Atcual hrs= 510 hrs

Actual rate = ARAH =2,448

                     =AR=2,448/510=$4.8

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