Exercise 10-5 Working Backwards from Labor Variances [LO10-2]
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 | Standard Hours | Standard Rate | Standard Cost |
Motor tune-up | 2.5 | $9.00 | $22.50 |
The record showing the time spent in the shop last week on motor tune-ups has been misplaced. However, the shop supervisor recalls that 50 tune-ups were completed during the week, and the controller recalls the following variance data relating to tune-ups: |
Labor rate variance | $ | 87 | F |
Labor spending variance | $ | 93 | U |
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. |
Labor efficiency variance = 93U - 87F = 180 U
Labor efficiency variance = (SH-AH) *SR
(2.5*50 - AH) * 9 =-180
125 - AH = - 20
ACTUAL HOURS = 145
Labpr rate variance = (SR-AR) *AH
(9 - AR) * 145 = 87
(9-AR) = 0.6
ACTUAL HOURLY RATE = 8.4
Exercise 10-5 Working Backwards from Labor Variances [LO10-2] The auto repair shop of Quality Motor Company...
Exercise 10-5 Working Backwards from Labor Variances [LO10-2] 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 Standard Hours Standard Rate Standard Cost Motor tune-up 2.5 $9.00 $22.50 The record showing the time spent in the shop last week on motor tune-ups has been misplaced. However, the shop supervisor recalls that 50 tune-ups...
Exercise 10-5 Working Backwards from Labor Variances (LO10-2] 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: Standard Hours 2.50 Standard Rate $33.00 Standard Cost Motor tune-up The record showing the time spent in the shop last week on motor tune-ups has been misplaced. However, the shop supervisor recalls that 58 tune-ups were completed during the week,...
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Exercise 10-5 Working Backwards from Labor Variances [LO10-2] 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: Standard Hours Standard Rate Standard Cost Motor tune-up 1.90 $6.60 $12.54 The record showing the time spent in the shop last week on motor tune-ups has been misplaced. However, the shop supervisor recalls that 200 tune-ups were completed during the...
Exercise 10-5 Working Backwards from Labor Variances (LO10-2] 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: Standard Hours 1.50 Standard Rate $6.20 Standard Cost $9.30 Motor tune-up The record showing the time spent in the shop last week on motor tune-ups has been misplaced. However, the shop supervisor recalls that 230 tune-ups were completed during the...
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Exercise 10-5 Working Backwards from Labor Variances [LO10-2] 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: Standard Hours Standard Rate Standard Cost Motor tune-up 2.50 $34.00 $85.00 The record showing the time spent in the shop last week on motor tune-ups has been misplaced. However, the shop supervisor recalls that 54 tune-ups were completed during the...
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