The auto repair shop of Quality Motor Company uses standards to control the labour time and labour cost in the shop. The standard labour cost for & Motor Re-up 181154 Standard Hours Job Motor tune-up Labour rate variance Total labour variance Required 5 Fill in the table below 7 Direct Labour Variance Actual (AUAHAR) 2 13 24 Total 153 5 9.00 $ The record showing the time spent in the shop last week on motor tune-ups has been misplaced. However, the shop supervisor recalls that 50 tune-ups were completed during the week, and the controller recalls the following variance data relating to tune-ups: 26 3 $ S 90.00 F (96.00) U Standard Rate Actual Standard (AUAH SR) Total Standard Cost 27.00 Total Standard (AU-SH-SR)
The auto repair shop of Quality Motor Company uses standards to control the labour time and labour cost in the shop. The standard labour cost for & Motor Re-up 181154 Standard Hours Job Motor tune-up Labour rate variance Total labour variance Required 5 Fill in the table below 7 Direct Labour Variance Actual (AUAHAR) 2 13 24 Total 153 5 9.00 $ The record showing the time spent in the shop last week on motor tune-ups has been misplaced. However, the shop supervisor recalls that 50 tune-ups were completed during the week, and the controller recalls the following variance data relating to tune-ups: 26 3 $ S 90.00 F (96.00) U Standard Rate Actual Standard (AUAH SR) Total Standard Cost 27.00 Total Standard (AU-SH-SR)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 labour time and labour cost in the shop. The standard labour cost for a motor tune-up follows:
Standard
Hours
Standard
Rate
Job
Motor tune-up
16
17 Direct Labour Variance
18
19
20
21
22
23
24 Total
25
26
27
The record showing the time spent in the shop last week on motor tune-ups has been misplaced. However, the shop supervisor recalls that 50 tune-ups
3 were completed during the week, and the controller recalls the following variance data relating to tune-ups:
9
L0 Labour rate variance
11 Total labour variance
12
23 Required
14
15 Fill in the table below
Actual
(AU AHAR)
3
$
S
$
90.00 F
(96.00) U
9.00 $
Actual Standard
(AUAH SR)
Total
Standard
Cost
27.00
Total
Standard
(AUSH-SR)
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