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: 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 54 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 $ 34.00 $ 85.00 1. Actual labor hours 2. Actual hourly rate 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.) $ 350 F $ 500 U X Answer is complete but not entirely correct. hours per hour 160 S 36.19 X
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: 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 54 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 $ 34.00 $ 85.00 1. Actual labor hours 2. Actual hourly rate 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.) $ 350 F $ 500 U X Answer is complete but not entirely correct. hours per hour 160 S 36.19 X
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text: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:
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 54 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
1. Actual labor hours
2. Actual hourly rate
Standard Rate Standard Cost
$ 34.00
$ 85.00
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.)
Answer is complete but not entirely correct.
hours
per
hour
160
$ 350 F
$ 500 U
$36.19 X
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