D Chapter 8 Homework X CO ezto.mheducation.com/ tpx Question 17 (of 2 0.50 point

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D Chapter 8 Homework X CO ezto.mheducation.com/ tpx Question 17 (of 2 0.50 points SkyChefs, Inc prepares in-light meals for a number of major airlines. One of the company's products is e meals using 1,700 direct labor-hours The company pald these direct company prepared 4 400 of thes labor workers a total of $17 000 for this work, or $10.00 per hour sa 59 40 per hour require 0.40 direct labor-hours at a cost of According to the standard cost card for this meal, it should Required: 1. According to the standards, what direct labor cost should have been incurred to prepare 4.400 meals? How much does this dffer from the actual direct labor cost? (Round labor-hours per meal a Number of meals prepares Standard drect labor-hours per meal Total direct labor hours allowed Standard drect labor cost per hour Total standard drect labor costm Actual cost incurred Total standard direct labor cost Total direct labor variance 2 Break down the difference computed in (1) abave into a labor rate variance and a labor efficiency variance. (indicate the effect of each variance by selecting Fin for favorableu for unfavorable, and "None" for no effect e, zero variance) Labor rate variance valance

Explanation / Answer

1.

2. Labour rate variance = Actual hours * (Standard rate - Actual rate)

= 1,700 * (9.4 - 10)

= 1,020 Unfavourable

Labour efficiency variance = Standard rate * (Standard hours - Actual hours)

= [(4.400*0.4) - 1,700] * 9.4

= 564 Favourable

Number of meals prepared (a) 4,400 Standard direct labour hours per meal (b) 0.4 Total direct labour hours allowed (c) = (a*b) 1,760 Standard direct labour cost per hour (d) 9.4 Total standard direct labour cost (e) = (c*d) 16,544 Actual cost incurred (f) 17,000 Total standard direct labour cost (g) = (e) 16,544 Total direct labour variance (h) = (f-g) 456 Unfavourable

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