Question

SkyChefs, 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 6,700 of these meals using 1,300 direct labor-hours. The company paid its direct labor workers a total of $16,900 for this work, or $13.00 per hour.
According to the standard cost card for this meal, it should require 0.20 direct labor-hours at a cost of $12.50 per hour.
Required:
1. What is the standard labor-hours allowed (SH) to prepare 6,700 meals?
2. What is the standard labor cost allowed (SH × SR) to prepare 6,700 meals?
3. What is the labor spending variance?
4. What is the labor rate variance and the labor efficiency 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 (i.e., zero variance). Input all amounts as positive values. Do no round intermediate calculations.)
1. Standard labor-hours allowed
2. Standard labor cost allowed
3. Labor spending variance
4. Labor rate variance
5. Labor efficiency variance

Answer 1

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

During the most recent week, the company prepared 6,700 of these meals using 1,300 direct labor-hours. The company paid its direct labor workers a total of $16,900 for this work or $13.00 per hour.

According to the standard cost card for this meal, it should require 0.20 direct labor-hours for $12.50 per hour.

1) Standard labor hour= 0,20* 6,700= 1,340 hours

2) Standard cost= 1,340*12.5= $16,750

3) Labor spending variance= 16,750 - 16,900= 150 unfavorable

4) Direct labor efficiency variance= (SQ - AQ)*standard rate

Direct labor efficiency variance= (1,340 - 1,300)*12.5= 500 favorable

Direct labor price variance= (Standard Rate - Actual Rate)*Actual Quantity

Direct labor price variance= (12.5 - 13)*1,300= 650 unfavorable