Accounting

Engines Done Right Co. is trying to establish the standard labor cost of a typical engine tune-up. The following data have been collected from time and motion studies conducted over the past month.

Actual time spent on the tune-up 1.0 hour
Hourly wage rate $16
Payroll taxes 10% of wage rate
Setup and downtime 10% of actual labor time
Cleanup and rest periods 20% of actual labor time
Employee benefits 25% of wage rate

(a)

Determine the standard direct labor hours per tune-up. (Round answer to 2 decimal places, e.g. 15.10.)

Standard direct labor hours per tune-up enter the standard direct labor hours per tune-up rounded to 2 decimal places hours

5 The following direct labor data pertain to the operations of Sheffield Corp. for the month of November:

Actual labor rate $12.25 per hr.
Actual hours used 19,920
Standard labor rate $12.00 per hr.
Standard hours allowed 18,700

Calculate the labor variances. Identify whether each variance is favorable or unfavorable.

Labor Price Variance $enter a dollar amount  select an option                            
Labor Quantity Variance $enter a dollar amount  select an option                            
Total Labor Variance $enter a dollar amount  select an option                            

Solution:

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