According to the standard cost card for this meal, it should require 0.50 direct

Question

According to the standard cost card for this meal, it should require 0.50 direct labor-hours at a cost of $9.40 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 (SH × 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?

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 2,350 direct labor-hours. The company paid its direct labor workers a total of $23,500 for this work, or $10.00 per hour. According to the standard cost card for this meal, it should require 0.50 direct labor-hours at a cost of $9.40 per hour. 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 varlance 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 (I.e., zero variance). Input all amounts as positive values. Do no round intermedlate calculations.) 1. Standard labor-hours allowed 2. Standard labor cost allowed 3. Labor spending variance 4.Labor rate variance Labor efficiency variance

Explanation / Answer

1) Standard Labor Hours Allowed :-

= 4800 * 0.50

= 2400 h

2) Standard Labor Cost Allowed :-

= 2400 * $9.40

= $22560

3) Labor Spending Variance :-

= Actual Hours * (Actual Hour Rate - Standard Hour Rate)

= 2350h * ($10.00 - $9.40)

= 2350 * $0.60

= $1410 U

4) Labor Rate Variance :-

= Actual Hours * (Actual Hour Rate - Standard Hour Rate)

= 2350h * ($10.00 - $9.40)

= 2350 * $0.60

= $1410 U

Labor Efficiency Variance :-

= Standard Hour Rate * (Actual Hours - Standard Hours)

= $9.40 * (2350 - 2400)

= $470 F

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.