The auto repair shop Quality Motor Company uses standards to control the labor t

Question

The auto repair shop 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:

Job Standard Hours Standard Rate Standard Cost

Motor tune-up 2.5 $9.00 $22.50

The record showing the time spent in the shop last week on motor tune-ups has been lost, however. The controller recalls the following variance data relating to tune-ups:

Labor Rate Variance $87 F

Spending Variance $93 U

What is the number of actual labor-hours spent on tune-ups during the week?

a. 7

b. 5

c. 21

d. 22.5

Explanation / Answer

Efficiency Variance = SR x ( AH - SH)

Standard Rate = $9

Standard hours = 50*2.5 = 125

Efficieny Variance = $87 F + $93U = $180

180 = 9 x ( AH - 125)

180 = 9AH - 1,125

9AH = 1305

AH = 1305/9 = 145 hours

Actual Hours worked = 145 hours

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.