Question

Appl Saved Chapter10 Homework(E10-1.2,3) Exercise 10-2 Direct Labor Variances [LO10-2] 2 SkyChefs, Inc, prepares in-flight meals for a number of major airlines. One of the company's products is grilled salmon in dill sauce with baby new potatoes and spring vegetables. During the most recent week, the company prepared 6,500 of these meals using 3,200 direct labor-hours. The company paid its direct labor workers a total of $36,800 for this work, or $11.50 per hour. 10 ponts According to the standard cost card for this meal, it should require 0.50 direct labor-hours at a cost of $11.00 per hour. Required: 1. What is the standard labor-hours allowed (SH) to prepare 6,500 meals? 2. What is the standard labor cost allowed (SH SR) to prepare 6,500 meals? What is the labor spending variance? 4. What is the labor rate variance and the labor efficiency variance? eBook Prnt (For requirements 3 and 4, indicate the effect of each veriance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Do no round intermediate calculations.) References Standard labor-hours allowed 2 Standard labor cost allowed 3 Labor spending variance Labor rate variance Labor efficlency variance 4 ¢1

Answer 1

Answer:

Solution

1. Standard labour hours allowed=number of meals×std. Direct labour hours per meal

=6500×.50

=3250direct labour hours

2.

Standard labour cost allowed=SH×SR

=3250 labour hours ×$11 per hour

=$35,750

3) Spending variance=actual cost incurred- standard direct labour cost

=$36,800-$35,750

=$1050 U

4)Labour rate variance=AH(AR-SR)

=3200 hours($11.50-$11)

=$1600 U

Labour efficiency variance=SR(AH-SH)

=$11×(3200-3250)

=$550 F