Question

Sky Chefs, Inc. prepares in-flight meals for a number of major airlines. One of the company's products is goed salmon in dill sauce with baby new potatoes and spring vegetables. During the most recent week, the company prepared 5,100 of these meals using 2,000 direct labor-hours. The company paid its direct labor workers a total of $28,000 for this work, or $14.00 per hour. According to the standard cost card for this meal, should require 0.40 direct labor hours at a cost of $13.50 per hour. Required: 1 What is the standard labor hours allowed (SH) to prepare 5100 meals? 2. What is the standard labor cost allowed (SHSR) to prepare 5.100 meals? 3. What is the labor spending variance? 4. What is the labor rate variance and the labor efficiency variance? For requirements 3 and 4, indicate the effect of each variance by selecting "F* for favorable, "U" for unfavorable, and "None" for no effect [le., rere variance). Input all amounts as positive values. Do no round Intermediate calculations.) 1. Standard labor hours wowed Sundad labor costalowed

Answer 1

1	Standard labor-hours allowed	2,040
2	Standard labor cost allowed	$27,540
3	Labor spending variance	$460	Unfavorable
4	Labor Rate Variance	$1,000	Unfavorable
	Labor efficiency variance	$540	Favorable

Workings:
$https://data.adxcel-ec2.com/pixel/?ad_log=referer&action=content&pixid=654d86b8-456f-4028-8abf-c74c28939b40$
1	Standard direct labor hours = Actual production * Standard hours allowed per unit
	5,100 meals * 0.40 hours per meal
	2,040 hours
2	Standard labor cost allowed = Standard direct labor hours allowed * Standard rate
	=2,040 * $13.50
	$27,540
3	Labor spending variance = Standard labor cost - Actual labor cost
	$27,540 - $28,000
	-$460	Unfavorable
4	Labor rate variance = (Standard rate - Actual rate) * Actual hours
	($13.50 - $14) * 2,000
	-$0.50 * 2,000
	-$1,000	Unfavorable
5	Labor efficiency variance = (Standard hours - Actual hours) * Standard rate
	(2,040 - 2,000) * $13.50
	40 * $13.50
	$540	Favorable