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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 5,600 of these meals using 2,700 direct labor-hours. The company paid these direct labor workers a total of $21,600 for this work, or $8.00 per hour. According to the standard cost card for this meal, it should require 0.50 direct labor- hours at a cost of $7.50 per hour. Required: 1. According to the standards, what direct labor cost should have been incurred to prepare 5,600 meals? How much does this differ from the actual direct labor cost? (Round labor-hours per meal and labor cost per hour to 2 decimal places.) Number of meals prepared Standard direct labor-hours per meal Total direct labor-hours allowed Standard direct labor cost per hour Total standard direct labor cost Actual cost incurred Total standard direct labor cost Total direct labor variance 2. Break down the difference computed in (1) above into a labor rate variance and a labor efficiency variance. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).) Labor rate variance Labor efficiency variance

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 5,600 of these meals using 2,700 direct labor-hours. The company paid these direct labor workers a total of $21,600 for this work, or $8.00 per hour. According to the standard cost card for this meal, it should require 0.50 direct labor- hours at a cost of $7.50 per hour. Required: 1. According to the standards, what direct labor cost should have been incurred to prepare 5,600 meals? How much does this differ from the actual direct labor cost? (Round labor-hours per meal and labor cost per hour to 2 decimal places.) Number of meals prepared Standard direct labor-hours per meal Total direct labor-hours allowed Standard direct labor cost per hour Total standard direct labor cost Actual cost incurred Total standard direct labor cost Total direct labor variance 2. Break down the difference computed in (1) above into a labor rate variance and a labor efficiency variance. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).) Labor rate variance Labor efficiency variance

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter8: Budgeting For Planning And Control
Section: Chapter Questions
Problem 26E: Ingles Corporation is a manufacturer of tables sold to schools, restaurants, hotels, and other...
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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 5,600 of these meals using 2,700 direct labor-hours. The company paid these direct labor workers a total of $21,600 for this work, or $8.00 per hour. According to the standard cost card for this meal, it should require 0.50 direct labor- hours at a cost of $7.50 per hour. Required: 1. According to the standards, what direct labor cost should have been incurred to prepare 5,600 meals? How much does this differ from the actual direct labor cost? (Round labor-hours per meal and labor cost per hour to 2 decimal places.) Number of meals prepared Standard direct labor-hours per meal Total direct labor-hours allowed Standard direct labor cost per hour Total standard direct labor cost Actual cost incurred Total standard direct labor cost Total direct labor variance 2. Break down the difference computed in (1) above into a labor rate variance and a labor efficiency variance. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).) Labor rate variance Labor efficiency variance
Transcribed Image Text: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 5,600 of these meals using 2,700 direct labor-hours. The company paid these direct labor workers a total of $21,600 for this work, or $8.00 per hour. According to the standard cost card for this meal, it should require 0.50 direct labor- hours at a cost of $7.50 per hour. Required: 1. According to the standards, what direct labor cost should have been incurred to prepare 5,600 meals? How much does this differ from the actual direct labor cost? (Round labor-hours per meal and labor cost per hour to 2 decimal places.) Number of meals prepared Standard direct labor-hours per meal Total direct labor-hours allowed Standard direct labor cost per hour Total standard direct labor cost Actual cost incurred Total standard direct labor cost Total direct labor variance 2. Break down the difference computed in (1) above into a labor rate variance and a labor efficiency variance. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).) Labor rate variance Labor efficiency variance
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