value: 10.00 points The auto repair shop of Quality Motor Company uses standards

Question

value: 10.00 points The auto repair shop of Quality Motor Company uses standards to control the labor time and labor costin the shop. The standard labor cost for a motor tune-up is given below: Standard Hours Standard Rate Standard Cost Motor tune-up 1.50 $6.20 9.30 The record showing the time spent in the shop last week on motor tune-ups has been misplaced. However, the shop supervisor recalls that 230 tune-ups were completed during the week, and the controller recalls the following variance data relating to tune-ups: Labor rate variance Labor spending variance $318 F $829 U Required: 1. Determine the number of actual labor-hours spent on tune-ups during the week. hours 2 Determine the actual hourly rate of pay for tune-ups last week (Round your answer to 2 declmal places.) per hour 4 40 Dll

Explanation / Answer

Labour efficiency variance = 829 U+318 F = 1147 U

Labour efficiency variance = (Standard hour-actual hour)Standard rate

-1147 = (230*1.5-X)*6.20

-1147 = 2139-6.20X

6.20X = 3286

X(actual hours) = 530 Hour

Labour rate variance = (Standard rate-actual rate)actual hour

318 = (6.20*530-530X)

530X = 2968

X(actual hourly rate) = 5.60 per hour

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