I CANNOT FIGURE THIS OUT FOR THE LIFE OF ME. *(It\'s not 570 actual labor hours;
ID: 2542689 • Letter: I
Question
I CANNOT FIGURE THIS OUT FOR THE LIFE OF ME. *(It's not 570 actual labor hours; I keep getting that)*
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 180 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. Determine the actual hourly rate of pay for tune-ups last week. (Round your answer to 2 decimal places.)
Standard Hours Standard Rate Standard Cost Motor tune-up 2.60 $4.00 $10.40Explanation / Answer
Labour efficiency variance = 408 U+576 U = 168 U
Labour efficiency variance = (Standard hours-actual hours)standard rate
-168 = (180*2.60*4-4X)
-168 = 1872-4X
4X = 2040
X(actual hours) = 510 hours
Labour rate variance = (Standard rate-actual rate) actual hours
-408 = (4*510-510X)
-408 = 2040-510X
510X = 2448
X(actual rate) = 4.80
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