Question

4. 2.00 points 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: Job Motor tune-up Standard Hours 3.00 Standard Rate $7.00 Standard Cost $21.00 The record showing the time spent in the shop last week on motor tune-ups has been misplaced. However, the shop supervisor recalls that 250 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 $ 900 $3.000 F F Required: 1. Determine the number of actual labor-hours spent on tune-ups during the week. Actual labor hours hours 2. Determine the actual hourly rate of pay for tune-ups last week. (Round your answer to 2 decimal places.) Actual hourly rate per hour

Answer 1

1	Determine the actual labor hours spent on tune ups during the week
	Efficiency varaince
	SR(AH-SH)	2100
		(3000-900)
	Standard rate	$7
	Standard hours (250 tune ups)	$750
		(250*3)
	7 X(AH -$750)	2100
	AH-$750	300
	AH	1050
	Actual labor hours	1050 hours
2	Determine actual hourly rate of pay for tune ups last week
	Rate variance
	AH(AR-SR)
	Actual labor hours	1050 hours
	Standard rate	$7
	1050(AR-$7)	-900
	AR-$7	0.86
	AR	7.86
	Actual hourly rate	$7.85 per hour