Ch 11 cl ezto.mheducation.com /hm.tpx SkyChefs, Inc., prepares in-fight meals fo

Question

Ch 11 cl ezto.mheducation.com /hm.tpx SkyChefs, Inc., prepares in-fight meals for a number of major airlines. One of the company's products is potatoes and spring vegetables. During the most recent week, the 4,000 of these meals using 960 direct labor-hours. The ompany paid these direct labor in dill sauce with baby new pr workers a total of $9,600 for this work, or $10.00 per hour According to the standard cost card for this meal, it should require 0.25 direct labor-hours at a cost of $9.75 per hour Required: 1. According to the standards, what direct labor cost should have been incurred to prepare 4,000 meals? How much does this differ from the actual direct labor cost? (Round labor-hours per meal and labor cost per hour to 2 decimal places.) Number of meals prepared Standard direct labor-hours per meal Total standard direct labor cost Total standard direct labor cost NO CELL PHONE USE RECEIPTS GIVEN ON ALL TRANSACTIONS 0 Page

Explanation / Answer

According to standards, what direct labour cost and actual cost :

Break down :

Direct labour rate variance = (standard rate-actual rate)actual hours

= (9.75*960-9600)

Direct labour rate variance = 240 Unfavourable

Direct labour efficiency variance = (standard hours-actual hours)standard rate

= (1000-960)9.75

Direct labour efficiency variance = 390 Favourable

Number of meals prepared 4000 standard direct labour hours per meal 0.25 Total standard hour allowed 1000 standard rate per hour 9.75 standard cost 9750 Actual labout cost 9600 Total standard labour cost 9750 Total direct labour variance 150 favourable

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