View History Bookmarks Develop Window Help er 10 Homework Help Exercise 10-2 Dir

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View History Bookmarks Develop Window Help er 10 Homework Help Exercise 10-2 Direct Labor Variances [L010-2] 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 5,600 of these meals using 2,700 direct labor-hours The According to the standard cost card for this meal, it should require 0.50 direct labor-hours at a cost of $7.50 per hour Required company pald its direct labor workers a total of $21,600 for this work, or $8.00 per hour 1. What Is the standard labor-hours allowed (SH) to prepare 5,600 meals? what is the standard labor cost allowed (SH·SR) to prepare 5,600 meals? 3. What is the labor spending varlance? 4 What is the labor rate varlance and the labor efficiency varlance? (For requirements 3 and 4, indicate the effect of each varliance by selecting " for favorable, "U" for unfavorable, and "None" for no effect (le, zero variance), Input all amounts as positive values. Do no round intermediate calculations) 1. Standard labor-hours alowed 2. Standand labor cost llowed Laber spending variance Labor eficiency variance Prev 2of6

Explanation / Answer

Req 1: Std labour hour required per unit of output 0.50 hr Actual Production 5600 meals Total Std labour hours required for actual ouput (5600 *0.5) = 2,800 hours Req 2: Std labour hours required for actual output 2800 hours Std labour rate per hour   $7.50 per hour Total std labour cost for actual output ( 2800 *7.50) = $ 21,000 Req 3: Std labour cost for actual ouput   $ 21,000 Actual labour cost for actual output   $21,600 Labour spending variance = Std labour cost - Actual labour cost                                                            21000 - 21600 = $ 600 unfavorable Req4: Actual labour hour = 2700 labour hours Actual labour rate per hour   $ 8.00 per hour Labour rate variance = Actual labour hours used(Std rate per hour - Actual rate per hour)                                            2700 ( 7.50 - 8.00) = $ 1,350 unfavorable Labour efficiency variance= Std rate per hour (Std labour hours for actual output- Actual hours used)                                                    7.50 ( 2800 -2700 ) = $750 favorable

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