1. MinnOil performs oil changes and other minor maintenance services (e.g., tire pressure checks) for cars.

The company advertises that all services are completed within 15 minutes for each service. On a recent

Saturday, 160 cars were serviced resulting in the following labor variances: rate, $19 unfavorable;

efficiency, $14 favorable. If MinnOil's standard labor rate is $7 per hour, determine the actual wage rate

per hour and the actual hours worked.

Wage Rate Hours Worked

a. $6.55 42.00

b. $6.67 42.71

c. $7.45 42.00

d. $7.50 38.00

2, A company isolates its raw material price variance in order to provide the earliest possible information to

the manager responsible for the variance. The budgeted amount of material usage for the year was

computed as follows:

150,000 units of finished goods x 3 pounds/unit x $2.00/pound = $900,000.

Actual results for the year were the following.

Finished goods produced 160,000 units

Raw materials purchased 500,000 pounds

Raw materials used 490,000 pounds

Cost per pound $2.02

The raw material price variance for the year was:

a. $9,600 unfavorable.

b. $9,800 unfavorable.

c. $10,000 unfavorable.

d. $20,000 unfavorable.