Question

In: Accounting

Labor costs of an auto repair mechanic are seldom based on actual hours worked. Instead, this...

Labor costs of an auto repair mechanic are seldom based on actual hours worked. Instead, this labor cost is based on an industry average of time estimated to complete a repair job. This means a customer can pay, for example, $120 for two hours of work on a car when the actual time worked was only one hour. Many experienced mechanics can complete repair jobs faster than the industry average. Assume that you are asked to complete such a survey for a repair center. The survey calls for objective input, and many questions require detailed cost data and analysis. The mechanics and owners know you have the survey and encourage you to complete it in a way that increases the average billable hours for repair work.

Required

Write a one-page memorandum to the mechanics and owners that describes the direct labor analysis you will undertake in completing this survey.

Solutions

Expert Solution

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

Labor costs of an auto repair mechanic are seldom based on actual hours worked. Instead, this...
Labor costs of an auto repair mechanic are seldom based on actual hours worked. Instead, this labor cost is based on an industry average of time estimated to complete a repair job. This means a customer can pay, for example, $120 for two hours of work, on a car when the actual time worked was only one hour. Many experienced mechanics and complete repair jobs faster than the industry average. Assume that you are asked to complete such a survey...
standard labor hours per unit 4.5 hours standard labor rate $17 per hour actual hours worked...
standard labor hours per unit 4.5 hours standard labor rate $17 per hour actual hours worked 2,000 hours actual labor $38,000 actual output 500 units What is the labor efficiency variance? $4,250 favorable $1,500 unfavorable $4,250 unfavorable $1,500 favorable Which is correct?
Budget Actual Direct labor hours. . . . . . . . . . . ....
Budget Actual Direct labor hours. . . . . . . . . . . . . . . . . . . . . . . . 7,600 hours 6,100 hours Machine hours. . . . . . . . . . . . . . . . . . . . . . . . . . . 7,000 hours 6,500 hours Depreciation on salespeople's autos. . . . . . . . . . . $21,500 $21,500...
Understanding Relationships between Overhead Variances, Budgeted Amounts, and Actual Units Produced and Direct Labor Hours Worked...
Understanding Relationships between Overhead Variances, Budgeted Amounts, and Actual Units Produced and Direct Labor Hours Worked Last year, Gladner Company had planned to produce 144,500 units. However, 145,945 units were actually produced. The company uses direct labor hours to assign overhead to products. Each unit requires 0.9 standard hour of labor for completion. The fixed overhead rate was $11 per direct labor hour and the variable overhead rate was $6.36 per direct labor hour. The following variances were computed: Fixed...
Data on Gantry Company's direct labor costs are given below: Standard direct-labor hours 50,000 Actual direct-labor...
Data on Gantry Company's direct labor costs are given below: Standard direct-labor hours 50,000 Actual direct-labor hours 49,000 Direct-labor efficiency variance-favorable $ 5,200 Direct-labor rate variance-favorable $ 9,800 Total direct labor payroll $ 245,000 What was Gantry's actual direct labor rate?
Actual Direct labor costs and Actual Direct material costs are written [entered, or put] on A...
Actual Direct labor costs and Actual Direct material costs are written [entered, or put] on A job-order sheet. Estimated, not actual, manufacturing overhead costs are entered on a Job-order Sheet. A. Explain why estimated costs are used. B. Explain how the amount of manufacturing Overhead costs entered on a particular job-order cost sheet is determined.
Specialty Auto Insurance wishes to compare the repair costs of moderatly damaged cars at two repair...
Specialty Auto Insurance wishes to compare the repair costs of moderatly damaged cars at two repair shops. To do this they sent seven cars to both repair shops to get the repair costs. The data is shown below. At the 0.01 significance level, can we conclude if there is a difference in the average repair costs for the two repair shops? Show your hypotheses. Explain your findings in a text box to the right. Car Repair Shop 1 Repair Shop...
Actual quantity of direct labor 5,000 hours Actual direct labor rate $10 per hour Total direct...
Actual quantity of direct labor 5,000 hours Actual direct labor rate $10 per hour Total direct labor variance $8,600 Unfavorable . Direct labor rate variance $4,000 Unfavorable . Standard hours allowed per unit produced 2 hours Required: Find the following unknowns. a. Direct labor efficiency variance b. Standard rate per direct labor hour c. Actual quantity produced
Differences in labor earnings are the result of wage differentials and the number of hours worked....
Differences in labor earnings are the result of wage differentials and the number of hours worked. Explain each of the following reasons for wage differentials: (a) occupational immobility, (b) compensating differentials, (c) cost of acquiring skills and (d) geographical immobility.
The Flapjack Corporation had 7,648 actual direct labor hours at an actual rate of $12.18 per...
The Flapjack Corporation had 7,648 actual direct labor hours at an actual rate of $12.18 per hour. Original production had been budgeted for 1,100 units, but only 956 units were actually produced. Labor standards were 7.3 hours per completed unit at a standard rate of $12.75 per hour. Round your answer to the nearest cent. The labor time variance is $4,359.36 unfavorable $4,359.36 favorable $8,532.30 unfavorable $8,532.30 favorable
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT