Question

In: Accounting

SkyChefs, Inc., prepares in-flight meals for a number of major airlines. One of the company’s products...

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.)

     

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).)

Solutions

Expert Solution

Particulars Standard Actual
Hours Rate amount Hours Rate amount
Labour                    2,800.00                            7.50                       21,000.00                   2,700.00                      8.0000          21,600.00
Actual Output                    5,600.00
Hours required= 6,500*.50                    2,800.00
Direct Labour cost variance = Standard cost - Actual cost
Direct Labour cost variance = 21000 - 21600
Direct Labour cost variance = 600 U
DLRV= (SR-AR)AH
DLRV= (7.50 - 8)2700
DLRV= 1,350 U
DLEV = (SH-AH)SR
DLEV = (2800 - 2700) 7.50
DLEV = 750 F

Related Solutions

SkyChefs, Inc., prepares in-flight meals for a number of major airlines. One of the company’s products...
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 6,600 of these meals using 1,950 direct labor-hours. The company paid its direct labor workers a total of $27,300 for this work, or $14.00 per hour. According to the standard cost card for this meal, it should require 0.30 direct labor-hours at a...
SkyChefs, Inc., prepares in-flight meals for a number of major airlines. One of the company’s products...
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 6,300 of these meals using 1,800 direct labor-hours. The company paid its direct labor workers a total of $18,000 for this work, or $10.00 per hour. According to the standard cost card for this meal, it should require 0.30 direct labor-hours at a...
SkyChefs, Inc., prepares in-flight meals for a number of major airlines. One of the company’s products...
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 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...
SkyChefs, Inc., prepares in-flight meals for a number of major airlines. One of the company’s products...
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 3,400 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 0.40 direct labor-hours at a...
SkyChefs, Inc., prepares in-flight meals for a number of major airlines. One of the company’s products...
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 its 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...
SkyChefs, Inc., prepares in-flight meals for a number of major airlines. One of the company’s products...
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 7,200 of these meals using 3,500 direct labor-hours. The company paid its direct labor workers a total of $31,500 for this work, or $9.00 per hour. According to the standard cost card for this meal, it should require 0.50 direct labor-hours at a...
SkyChefs, Inc., prepares in-flight meals for a number of major airlines. One of the company’s products...
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 4,800 of these meals using 1,400 direct labor-hours. The company paid these 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...
1.) SkyChefs, Inc., prepares in-flight meals for a number of major airlines. One of the company’s...
1.) 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 7,000 of these meals using 2,700 direct labor-hours. The company paid its direct labor workers a total of $27,000 for this work, or $10.00 per hour. According to the standard cost card for this meal, it should require 0.40 direct labor-hours at...
Exercise 10-2 Direct Labor Variances [LO10-2] SkyChefs, Inc., prepares in-flight meals for a number of major...
Exercise 10-2 Direct Labor Variances [LO10-2] 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 6,600 of these meals using 1,950 direct labor-hours. The company paid its direct labor workers a total of $27,300 for this work, or $14.00 per hour. According to the standard cost card for this meal, it should...
Exercise 10-2 Direct Labor Variances [LO10-2] SkyChefs, Inc., prepares in-flight meals for a number of major...
Exercise 10-2 Direct Labor Variances [LO10-2] 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 6,600 of these meals using 1,950 direct labor-hours. The company paid its direct labor workers a total of $27,300 for this work, or $14.00 per hour. According to the standard cost card for this meal, it should...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT