Financial & Managerial Accounting
14th Edition
ISBN: 9781337515498
Author: WARREN
Publisher: Cengage
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Textbook Question
Chapter 22, Problem 22.11EX
Direct labor variances for a service company
Hit-n-Run Food Trucks, Inc. owns and operates food trucks (mobile kitchens) throughout the west coast. The company's employees have varying wage levels depending on their experience and length of time with the company. Employees work 8-hour shifts and are assigned to a truck each day based on labor needs to support the daily menu. One of its trucks, Jose O’Brien's Mobile Fiesta, specializes in Irish-Mexican fusion cuisine. The truck offers a single menu item that changes daily. On November 11, the truck prepared 200 of its most popular item, the Irish breakfast Enchilada, the following data are available for that day:
Quantity of direct labor used | |
(3 employees, working 8-hour shifts) | 24 hrs. |
Actual rate for direct labor | $15.00 per hr. |
Standard direct labor per meal | 0.1 hr. |
Standard rate for direct labor | $15.50 per hr. |
- A. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance.
- B. Discuss what might have caused these variances.
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Paradise Pool Cleaning Service Income Statement
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Benton
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Angle Max Industries produces a product which goes through two operations, Assembly and Finishing,
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Direct labor hours
Machine hours
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Assume that the Assembly Department allocates overhead using a plantwide overhead rate based on machine hours.
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O$17.60.
Assembly
180,000 DLH
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$20.40.
Finishing
148,000 DLH
91, 200 MH
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Chapter 22 Solutions
Financial & Managerial Accounting
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