Question

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 4,800 of these meals using 882 direct labor-hours. The company paid its direct labor workers a total of $10,143 for this work, or $11.50 per hour. According to the standard cost card for this meal, it should require 0.20 direct labor-hours at a cost of $10.50 per hour. Required: 1. What is the standard labor-hours allowed (SH) to prepare 4,800 meals? 2. What is the standard labor cost allowed (SHX SR) to prepare 4,800 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 (.e., zero variance). Input all amounts as positive values. Do not round intermediate calculations.) 1. 2 3 4. Standard labor-hours allowed Standard labor cost allowed Labor spending variance Labor rate variance Labor efficiency variance

Answer 1

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Answer 10 standard labor houry allowed to prepare 4800 meals = Number of mealy prepared x Standard direct labor hour Per meal = 4800 x 0.20 = 960 direct labor hours f) standard direct labor cost per hour = $10.50 per hour Standard labor cast allowed to prepare 4800 mealy - 960 x10.50 [SHASR] - $10080 3) labor Spending variance = labor rate variance tlabor efficiency variance = $8820+ $8195 = $630 14) Labor naté variance = SR-AR) XAH -(10.50 -11:50)x 882 hry =$8820 labor efficiency variance - [SH-AX3R =960-882]* 10.50 -- $819 F