Quality Motor Company is an auto repair shop that uses standards to control its labor time and labor cost. The standard labor cost for a motor tune-up is given below: Motor tune-up Standard Hours 2.50 Standard Rate Standard Cost $ 35.00 $ 87.50 The record showing the time spent in the shop last week on motor tune-ups has been misplaced. However, the shop supervisor recalls that 60 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 $ 50 F $ 55 U Required: 1. Determine the number of actual labor-hours spent on tune-ups during the week. 2. Determine the actual hourly pay rate for tune-ups last week. (Round your answer to 2 decimal places.)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Quality Motor Company is an auto repair shop that uses standards to control its labor time and labor cost. The standard labor cost
for a motor tune-up is given below:
Motor tune-up
Standard
Hours
2.50
The record showing the time spent in the shop last week on motor tune-ups has been misplaced. However, the shop supervisor
recalls that 60 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
Standard Rate Standard Cost
$87.50
$ 35.00
1. Actual labor hours
2. Actual hourly rate
$ 50 F
$ 55 U
Required:
1. Determine the number of actual labor-hours spent on tune-ups during the week.
2. Determine the actual hourly pay rate for tune-ups last week. (Round your answer to 2 decimal places.)
hours
per hour
Transcribed Image Text:Quality Motor Company is an auto repair shop that uses standards to control its labor time and labor cost. The standard labor cost for a motor tune-up is given below: Motor tune-up Standard Hours 2.50 The record showing the time spent in the shop last week on motor tune-ups has been misplaced. However, the shop supervisor recalls that 60 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 Standard Rate Standard Cost $87.50 $ 35.00 1. Actual labor hours 2. Actual hourly rate $ 50 F $ 55 U Required: 1. Determine the number of actual labor-hours spent on tune-ups during the week. 2. Determine the actual hourly pay rate for tune-ups last week. (Round your answer to 2 decimal places.) hours per hour
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