The auto repair shop of Quality Motor Company uses standards to control the labo
ID: 2571188 • Letter: T
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 170 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.)
Job Standard Hours Standard Rate Standard Cost Motor tune-up 1.80 $5.50 $9.90Explanation / Answer
1. Determine the number of actual labor-hours spent on tune-ups during the week.
Actual labour cost = Standard labour cost+Labour spending variance
= (170*9.90)+1275
Actual labour cost = 2958
Labour rate variance = (standard rate-actual rate)actual hours
-153 = (5.50*X-2958)
-5.50X = -2958+153
-5.50X = -2805
Actual hour = 2805/5.50 = 510 hours
2. Determine the actual hourly rate of pay for tune-ups last week. (Round your answer to 2 decimal places.)
Hourly rate = Actual cost/actual hour = 2958/510 = 5.80 per hour
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