Exercise 10-5 Working Backwards from Labor Variances [LO10-2] The auto repair shop of Quality Motor...
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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:
| Standard Hours | Standard Rate | Standard Cost | |
| Motor tune-up | 2.50 | $35.00 | $87.50 |
The record showing the time spent in the shop last week on motor tune-ups has been misplaced. However, the shop supervisor recalls that 60 tune-ups were completed during the week, and the controller recalls the following variance data relating to tune-ups:
| Labor rate variance | $ | 50 | F |
| Labor spending variance | $ | 55 | 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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