ork, Ch 10 6 SkyChefs, Inc., prepares in-flight meals for a number of major airl
ID: 2519635 • Letter: O
Question
ork, Ch 10 6 SkyChefs, Inc., prepares in-flight meals for a number of major airlines. One of the company's products is grlled salmon in dill sauce with baby new potatoes and spring vegetables. During the most recent week, the company prepared 4,400 of these meals using 1/00 direct labor-hours. The company paid its direct labor workers a total of $17000 for this work, or $10.00 per hour. According to the standard cost card for this meal. it should require 040 direct labor hours at a cost of $940 per hour Required: 1. What is the standard labor-hours allowed (SH) to prepare 4,400 meals? 2. What is the standard labor cost allowed (SH SR) to prepare 4,400 meals? 3. What is the labor spending variance? 4. What is the labor rate variance and the labor efficlency 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 (G.e., zero variance). Input all amounts as positive values. Do no round intermediate calculations.) 2 of 11 Next >Explanation / Answer
a) Standard labour hour allowed = 4400*.40 = 1760 hour
b) Standard cost allowed = 1760*9.4 =16544
c) Total labour cost variance = 16544-17000 = 456 U
d) Labour rate variance = (9.4*1700-17000) = 1020 U
Labour efficiency variance = (1760-1700)*9.4 = 564 F
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