Question
Exercise 10-5 Working Backwards from Labor Variances [LO10-2] The auto repair shop of Quality Motor Company uses standards to control the labor time and labor
Exercise 10-5 Working Backwards from Labor Variances [LO10-2]
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:
~Motor tune-up
Standard Hours~1.50
Standard Rate~$6.20
Standard Cost~$9.30
The record showing the time spent in the shop last week on motor tune-ups has been misplaced. However, the shop supervisor recalls that 230 tune-ups were completed during the week, and the controller recalls the following variance data relating to tune-ups:
Labor rate variance $1,060F
Labor spending variance $87 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.)
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