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