SkyChefs, inc. prepares in-flight meals for a number of major airlines. One of t

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 4000 of these meals using 960 direct labor hours. The company paid these direct labor workers a total of $19,200 for this work, or $20.00 per hour. According to standard cost card for this meal, it should require 0.25 direct labour-hours at a cost of $19.75 per hour.

1. What is the standard labor-hours allowed (SH) to prepare 4,000 meals?

2. What is the standard labor cost allowed (SH x SR) to prepare 4,000 meals?

3. What is the labor spending variance?

4. What is the labor rate variance and the labor efficiency variance?

Explanation / Answer

1) Standard labor hours allowed actual output*standard direct labor hours 4000*.25 1000 hours 2) Standard labor cost allowed 1000*19.75 19750 3) labor spending variance 19,200 - 19,750 550 F 4) labor rate variance (Actual rate - standard rate )*AH (20 - 19.75)*960 240 U labor Efficiency variance (Actual hrs - standard hrs allowed)*standard rate (960 - 1000)*19.75 790 F

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

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