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Problem

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

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

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M92599199
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