In: Accounting
Norweigian Cruise Line (NCL) hires gourmet chefs for their signature Alaska cruises. NCL has a direct labor standard of 2 hours per meal cooked. Each employee has a standard wage rate of $21.50 per hour. During August, NCL paid $95,634 to employees for 4,620 hours worked. 2,560 meals were cooked during August. What is the flexible budget amount for direct labor?
| Flexible budget amount means Standard labor cost for the actual output | |||||||||
| Here output is 2,560 meals | |||||||||
| Standard cost for one meal is 2hours and cost of $21.5 per hour, So standard cost for a meal is 21.5*2 = $43 | |||||||||
| So, standard cost for 2560 meals is | |||||||||
| =2560 meals * $43 | |||||||||
| $ 110,080 | |||||||||
| So, flexible budget amount for direct labor is $110,080 | |||||||||
| I hope this solves your doubt. | |||||||||
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