20.00 points AirMeals, Inc., prepares in-flight meals for a number of major airl

Question

20.00 points AirMeals, Inc., prepares in-flight meals for a number of major airlines. One of the company's products is stuffed cannelloni with roasted pepper sauce, fresh baby corn, and spring salad. During the most recent week, the company prepared 4,800 of these meals using 1,400 direct labor-hours. The company paid these direct labor workers a total of $18,200 for this work, or $13.00 per hour. According to the standard cost card for this meal, it should require 0.30 direct labor-hours at a cost of $12.50 per hour. Required: 1. According to the standards, what direct labor cost should have been incurred to prepare 4,800 meals? How much does this differ from the actual direct labor cost? Number of meals prepared Standard direct labor-hours per meal Total direct labor-hours allowed Standard direct labor cost per hour Total standard direct labor cost Actual cost incurred Standard direct labor cost Spending variance-unfavorable

Explanation / Answer

1. Number of Meals Prepared 4800 Standard direct labour-hours per meal 0.3 Total direct labour-hours allowed 1440 Standard direct labour cost per hour 12.5 Total standard direct labour cost 18000 Actual Cost incurred 18200 Standard Direct Labour cost as above 18000 Spending Variance - Unfavorable -200 U 2. Labour Rate Variance -700 U Labour Efficiency Variance 500 F

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