Direct labor variances—solving for unknowns Ackerman’s Garage uses standards to plan and control labor time and expense. The standard time for an engine tune-up is 3 hours, and the standard labor rate is $25 per hour. Last week, 42 tune- ups were completed. The labor efficiency variance was 14 hours unfavorable, and the labor rate variance totaled $140 favorable.
Required:
a. Calculate the actual direct labor hourly rate paid for tune-up work last week.
b. Calculate the dollar amount of the labor efficiency variance.
c. What is the most likely explanation for these two variances? Is this a good trade-off for the management of the garage to make? Explain your answer.
We need at least 10 more requests to produce the solution.
0 / 10 have requested this problem solution
The more requests, the faster the answer.