Determine actual hourly rate of pay for tune-ups last week

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Question - 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

$36.00

$90.00

The record showing the time spent in the shop last week on motor tune-ups has been misplaced. However, the shop supervisor recalls that 56 tune-ups were completed during the week, and the controller recalls the following variance data relating to tune-ups:

Labor rate variance $400 F

Labor spending variance $500 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.

Reference no: EM133120598

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