0 ezto.mheducation.com/hm.tpx 2· 3750 points Inc., prepares in-Mlight meals for
ID: 2581658 • Letter: 0
Question
0 ezto.mheducation.com/hm.tpx 2· 3750 points Inc., prepares in-Mlight meals for a number of major airtines. One of the company's products is company prepared 7,200 of these meals using 3,500 direct labor-hours. The company paid these direct shouid require 0 50 direct labor-hours at a cost of gniled salmon in dill sauce with baby new potatoes and spring vegetables. During the most recent week, the abor workers a total of $31,500 for this work, or $9.00 per hour Aocordng to the standard cost card for this meail, $8.50 per hour 1. According to the standards, what direct labor cost should have been incurred to prepare 7,200 meals? selecting "F for favorable, "U" for unfavorable, and "None" for no offlect (i.e., zero variance)J Round laber-hours per meal and labor cost per hour to 2 decimal places) Number of meais prepared Standand direct labor-hours per meal Total direct labor-hours allowed Standard direct labor cost per hour Total standard direct labor cost Actu-cost incurred Total standard direct labor cost Total direct labor 2 Break down the difference computed in (1) above into a laber rate varianoe and a labor efficiency variance. (Indicate the offect of each variance by selecting T for tavorable, "U for unfavorable, and "None" for no aftlect Qe, ero variancel) esc 2 4 tabExplanation / Answer
Number of meals prepared 7,200 Standard direct labor-hours per meal 0.50 Total direct labor-hours allowed 3,600 Standard direct labor cost per hour $ 8.50 Total standard direct labor cost $ 30,600 Actual cost incurred $ 31,500 Total standard direct labor cost 30,600 Total direct labor variance 900 Unfavorable Labor rate variance[AH x (AR-SR)] 1750 Unfavorable 3500*(9-8.5) Labor efficiency variance[SR x (AH-SH)] 850 Favorable 8.5*(3600-3500)
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