Exercise 23-4 (Part Level Submission) Monte Services, Inc. is trying to establis

Question

Exercise 23-4 (Part Level Submission) Monte Services, Inc. is trying to establish the standard labor cost of a typical brake repair. The following data have been collected from time and motion studies conducted over the past month Actual time spent on the brake repair Hourly wage rate Payroll taxes Setup and downtime Cleanup and rest periods Fringe benefits 4.0 hour $14 14% of wage rate 7% of actual labor time 31% of actual labor time 22% of wage rate (a) Your answer is correct. Determine the standard direct labor hours per brake repair. (Round answer to 2 decimal places, e.g. 1.25.) Standard direct labor hours per brake repair 5.52 hours

Explanation / Answer

Direct Labor Quantity Variance = (SH-AH) SR

Standard Hours = 5.52

Actual Hours = 4.60

Standard Rate = $19.04

Thus Direct Labor Quantity Variance will be = (5.52 - 4.60) * 19.04

= 17.52 (Favorable)

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