Please answer this question correctelly. Highlight the final answers that should
ID: 2563640 • Letter: P
Question
Please answer this question correctelly. Highlight the final answers that should be written down:
5 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 1.80 Standard Rate Standard Cost oints Motor tune-up $5.50 $9.90 The record showing the time spent in the shop last week on motor tune-ups has been misplaced. However, the shop supervisor recalls that 170 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 S 605 F $ 737 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. (Round your answer to 2 decimal places.) Answer is complete but not entirely correct. Actual labor hours 450hours 2Actual hourly rate 3.34hourExplanation / Answer
1) Determine the actual labor-hours spent on tune-ups during the week: 550 hours
WORKING:
Efficiency variance = SR (AH-SH)
Standard rate $ 5.50
Standard hours (170 tune-ups * 1.80) 306
1342 = 5.50 ( AH-306)
244 = AH - 306
AH = 550 hours
2) Determine the actual hourly rate of pay for tune-ups last week: $4.4 per hour
WORKING:
Rate variance = AH (AR-SR)
Actual Hours = 550 hours
Standard rate $ 5.50
-605 = 550 (AR - 5.50)
-1.1 = AR - 5.50
4.4 =AR