ct.html The auto repair shop of Quality Motor Company uses standards to control

Question

ct.html The auto repair shop of Quality Motor Company uses standards to control the labor time and labor co labor cost for a motor tune-up is given be St Rate Standard Cost Hours 2.5 $25.e0 $62.5e The record showing the time spent in the shop last week on motor tune-ups has been m that 5 splaced. However, the shop were completed during the week, and the controller recalls the following variance data relating to s 150 F 280 U the number of actual labor-hours spent on tune-ups during the week ne the actual hourly rate of pay for tune-ups last week. (Round your answer to 2 decimal places.) 2.

Explanation / Answer

Std hr for 1 motor tune up = 2.5 hrs, so std hr for 50 motor tune up = 2.5*50 = 125 hrs

Std rate = 25

Therefore, std cost = 125*25 = $ 3125

Labor spending variance = Std cost - Actual cost

-200 = 3125 - Actual cost

Actual cost = 3125+200 = 3325

Also Labor spending var = Labor rate var + Labor efficiency var

-200 = 150+ labor efficiency var

Labor efficiency var = -350

Labor efficiency var = (Std hr - Actual labor hrs)* Std rate

-350 = (125-Actual labor hrs) * 25

-14= 125 - actual labor hrs

Actual labor hrs = 125+14 = 139 lab hrs

Actual cost = Actual lab hrs * Actual rate per labor hr

3325 = 139* Actual rate per labor hr

Actual rate per labor hr = 3325/139 = $ 23.92

Actual Labor Hrs 139 hrs Actual hourly rate 23.92 per hr

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