s, Inc., prepares in-flight meals for a number of major airlines. One of the com

Question

s, 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 7,200 of these meals using 500 direct labor-hours. The company paid its direct labor workers a total of $31,500 for this work, or $9.00 per hour According to the standard cost card for this meal, it should require 0.50 direct labor-hours at a cost of $8.50 per hour nts kipped Required: 1. What is the standard labor-hours allowed (SH) to prepare 7,200 meals? 2. What is the standard labor cost allowed (SH x SR) to prepare 7,200 meals? 3. What is the labor spending vari?nce? 4. What is the labor rate variance and the labor efficiency variance? eBook Hint (For requirements 3 and 4, indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" fo no effect (i.e., zero variance). Input all amounts as positive values. Do no round intermediate calculations.) Print ferences 1. Standard labor-hours allowed 2 Standard labor cost allowed 3. Labor spending variance 4 Labor rate variance Labor efficiency variance

Explanation / Answer

1. Std labour hours toprepare 7200 meals = 7200*.05 = 3600hours

2. Std labour cost to prepare 7200 meals= 3600*8.50 = $30,600

3. Labor spending variance = 31500-30600= $900A

4.Labour rate variance = (9-8.50)*3500 = $1750A

Labor efficiency variance = 1750-900 = 850F

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