SkyChefs, Incorporated, prepares in-flight meals for a number of major airlines. One of the company’s products is grilled salmon with new potatoes and mixed vegetables. During the most recent week, the company prepared 4,800 of these meals using 1,400 direct labor-hours. The company paid its direct labor workers a total of $18,200 for this work, or $13.00 per hour.According to the standard cost card for this meal, it should require 0.30 direct labor-hours at a cost of $12.50 per hour.Required:What is the standard labor-hours allowed (SH) to prepare 4,800 meals?What is the standard labor cost allowed (SH × SR) to prepare 4,800 meals?What is the labor spending variance?What is the labor rate variance and the labor efficiency variance?Note: 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. 1. Standard labor-hours allowed2. Standard labor cost allowed3. Labor spending variance4. Labor rate variance4. Labor efficiency variance

Cost variance is an important measure in project management, as it can provide valuable information…

Answered: SkyChefs, Incorporated, prepares…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter9: Evaluating Variances From Standard Costs

Section: Chapter Questions

Problem 5DQ: A. What are the two variances between the actual cost and the standard cost for direct labor? B. Who...

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Required:

What is the standard labor-hours allowed (SH) to prepare 4,800 meals?
What is the standard labor cost allowed (SH × SR) to prepare 4,800 meals?
What is the labor spending variance?
What is the labor rate variance and the labor efficiency variance?
Note: 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.

1. Standard labor-hours allowed
2. Standard labor cost allowed
3. Labor spending variance
4. Labor rate variance
4. Labor efficiency variance

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

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