kyChefs, Inc., prepares in-flight meals for a number of major airlines. One of t

Question

kyChefs, 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 3,500 of these meals using 1,710 direct labor-hours. The company paid its direct labor workers a total of $23,940 for this work, or $14.00 per hour.

According to the standard cost card for this meal, it should require 0.50 direct labor-hours at a cost of $13.50 per hour.

Required:

1. What is the standard labor-hours allowed (SH) to prepare 3,500 meals?

2. What is the standard labor cost allowed (SH × SR) to prepare 3,500 meals?

3. What is the labor spending variance?

4. What is the labor rate variance and the labor efficiency variance?

Explanation / Answer

1) SH allowed = actual output *direct labor hours per unit                      = 3,500*.50 1750 2) Standard labor cost allowed = SH*SR 1,750*13.50 23625 3) labor spending variance = 23,940 - 23,625 315 U 4) labor rate variance (Actual rate - standard rate )*Actual hours (14-13.50)*1710 855 U labor Efficiency variance (Actual hours - standard hours)*standard rate (1710 - 1750)*13.50 540 F

Related Questions

Navigate

• Browse (All)
• Browse K
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.