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 4,000 of these meals using 750
direct labor-hours. The company paid these direct labor workers a
total of $6,000 for this work, or $8.00 per hour.
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According to the standard cost card for this meal, it should
require 0.20 direct labor-hours at a cost of $7.00 per hour.
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Required: |
| 1. |
According to the standards, what direct labor cost should have
been incurred to prepare 4,000 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.)
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| Number of meals prepared |
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| Standard direct labor-hours per meal |
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| Total direct labor-hours
allowed |
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| Standard direct labor cost
per hour |
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| Total standard direct labor
cost |
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| Actual cost incurred |
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| Total standard direct labor
cost |
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| Total direct labor
variance |
|
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| 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).)
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| Labor rate variance |
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| Labor efficiency variance |
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