Engines Done Right Co Instructions
(A) Determine the Standard Direct Labor Hours Per Tune-Up

question 43

Essay

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. $$\begin{array} { l l } \text { Actual time spent on the tune-up } & 1.0 \text { hour } \\\text { Hourly wage rate } & \$ 16 \\\text { Payroll taxes } & 10 \% \text { of wage rate } \\\text { Setup and downtime } & 10 \% \text { of actual labor time } \\\text { Cleanup and rest periods } & 20 \% \text { of actual labor time } \\\text { Fringe benefits } & 25 \% \text { of wage rate }\end{array}$$ Instructions
(a) Determine the standard direct labor hours per tune-up
(b) Determine the standard direct labor hourly rate.
(c) Determine the standard direct labor cost per tune-up.
(d) If a tune-up took 1.5 hours at the standard hourly rate what was the direct labor quantity variance?

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Definitions:

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The imposition of taxes on the same income, asset, or financial transaction at two different levels of government.

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