Question: Air Meals, Inc., prepares in-flight meals for a number of major airlines. One of the company's products is stuffed cannelloni with roasted pepper sauce, fresh baby corn, and spring salad. During the most recent week, the company prepared 6,700 of these meals using 1,300 direct labor hours. The company paid these direct labor workers a total of $16,900 for this work or $13 per hour.According to the standard cost card for this meal, it should require 0.20 direct labor hours at a cost of $12.50 per hour. Required: 1a. According to the standards, what direct labor cost should have been incurred to prepare 6,700 meals?1b. How much does this differ from the actual direct labor cost?2. Break down the difference computed in (1) above into a labor rate variance and a labor efficiency variance. Carpe Diem Co. reported the following variances for the period: Direct materials price variance: $1,700 U Direct labor efficiency variance: 23,600 U Fixed overhead volume variance: 10,200 U Fixed overhead budget variance: 20,000 F Direct materials quantity variance: 6,500 F Direct labor rate variance: 2,000 F Based on this information, which of the following statements is true? a) Spending on fixed overhead was greater than planned. b) Carpe Diem produced more units than planned. c) The direct labor static budget variance is favorable. d) The direct material flexible budget variance is favorable. Krizum Industries makes heavy construction equipment. The standard for a particular crane calls for 17 direct labor-hours at $15 per direct labor-hour. During a recent period, 1,150 cranes were made. The labor rate variance was zero and the labor efficiency variance was $4,800 unfavorable.How many actual direct labor-hours were worked?
Question: Air Meals, Inc., prepares in-flight meals for a number of major airlines. One of the company's products is stuffed cannelloni with roasted pepper sauce, fresh baby corn, and spring salad. During the most recent week, the company prepared 6,700 of these meals using 1,300 direct labor hours. The company paid these direct labor workers a total of $16,900 for this work or $13 per hour.According to the standard cost card for this meal, it should require 0.20 direct labor hours at a cost of $12.50 per hour. Required: 1a. According to the standards, what direct labor cost should have been incurred to prepare 6,700 meals?1b. How much does this differ from the actual direct labor cost?2. Break down the difference computed in (1) above into a labor rate variance and a labor efficiency variance. Carpe Diem Co. reported the following variances for the period: Direct materials price variance: $1,700 U Direct labor efficiency variance: 23,600 U Fixed overhead volume variance: 10,200 U Fixed overhead budget variance: 20,000 F Direct materials quantity variance: 6,500 F Direct labor rate variance: 2,000 F Based on this information, which of the following statements is true? a) Spending on fixed overhead was greater than planned. b) Carpe Diem produced more units than planned. c) The direct labor static budget variance is favorable. d) The direct material flexible budget variance is favorable. Krizum Industries makes heavy construction equipment. The standard for a particular crane calls for 17 direct labor-hours at $15 per direct labor-hour. During a recent period, 1,150 cranes were made. The labor rate variance was zero and the labor efficiency variance was $4,800 unfavorable.How many actual direct labor-hours were worked?
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter8: Budgeting For Planning And Control
Section: Chapter Questions
Problem 26E: Ingles Corporation is a manufacturer of tables sold to schools, restaurants, hotels, and other...
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Air Meals, Inc., prepares in-flight meals for a number of major airlines.
One of the company's products is stuffed cannelloni with roasted
pepper sauce, fresh baby corn, and spring salad. During the most
recent week, the company prepared 6,700 of these meals using 1,300
direct labor hours. The company paid these direct labor workers a total
of $16,900 for this work or $13 per hour.According to the standard cost
card for this meal, it should require 0.20 direct labor hours at a cost of
$12.50 per hour. Required: 1a. According to the standards, what direct
labor cost should have been incurred to prepare 6,700 meals?1b. How
much does this differ from the actual direct labor cost?2. Break down
the difference computed in (1) above into a labor rate variance and a
labor efficiency variance.
Carpe Diem Co. reported the following variances for the period:
Direct materials price variance: $1,700 U
Direct labor efficiency variance: 23,600 U
Fixed overhead volume variance: 10,200 U
Fixed overhead budget variance: 20,000 F
Direct materials quantity variance: 6,500 F
Direct labor rate variance: 2,000 F
Based on this information, which of the following statements is true?
a) Spending on fixed overhead was greater than planned.
b) Carpe Diem produced more units than planned.
c) The direct labor static budget variance is favorable.
d) The direct material flexible budget variance is favorable.
Krizum Industries makes heavy construction equipment. The standard
for a particular crane calls for 17 direct labor-hours at $15 per direct
labor-hour. During a recent period, 1,150 cranes were made. The labor
rate variance was zero and the labor efficiency variance was $4,800
unfavorable.How many actual direct labor-hours were worked?
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