SkyChefs, Inc., prepares in-fight 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 2.800 direct labor-hours. The company paid its direct labor workers a total of $22.400 for this work, or $8.00 per hour. According to the standard cost card for this meal, it should require 0.40 direct labor-hours at a cost of $7.50 per hour. Required: 1. What is the standard labor-hours allowed (SH) to prepare 7.200 meals? 2 What is the standard labor cost allowed (SH x SR) to prepare 7.200 meals? 4. What is the labor rate variance and the labor efficiency variance? (For requirements 3 and 4, Indicate the effect of each varlance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (I.e., zero varlance). Input all amounts as positive values. Do not round Intermediate calculations.) Standard labor-hours alowed 2 Standard labor cost allowed Labor spending variance 3. 4. Labor rate variance Labor efficiency variance 12i+

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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SkyChefs, Inc., prepares in-fight 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
2,800 direct labor-hours. The company paid its direct labor workers a total of $22,400 for this work, or $8.00 per hour.
According to the standard cost card for this meal, it should require 0.40 direct labor-hours at a cost of $7.50 per hour.
Requlred:
1. What is the standard labor-hours allowed (SH) to prepare 7,200 meals?
2 What is the standard labor cost allowed (SH x SR) to prepare 7.200 meals?
3. What is the labor spending variance?
4. What is the labor rate variance and the labor efficiency variance?
(For requlrements 3 and 4, Indicate the effect of each varlance by selecting "F" for favorable, "U" for unfavorable, and "None" for
no effect (I.e., zero varlance). Input all amounts as positive values. Do not round Intermedlate calculatlons.)
1.
Standard labor-hours allowed
2.
Standard labor cost allowed
3.
Labor spending variance
4.
Labor rate variance
Labor efficiency variance
Transcribed Image Text:SkyChefs, Inc., prepares in-fight 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 2,800 direct labor-hours. The company paid its direct labor workers a total of $22,400 for this work, or $8.00 per hour. According to the standard cost card for this meal, it should require 0.40 direct labor-hours at a cost of $7.50 per hour. Requlred: 1. What is the standard labor-hours allowed (SH) to prepare 7,200 meals? 2 What is the standard labor cost allowed (SH x SR) to prepare 7.200 meals? 3. What is the labor spending variance? 4. What is the labor rate variance and the labor efficiency variance? (For requlrements 3 and 4, Indicate the effect of each varlance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (I.e., zero varlance). Input all amounts as positive values. Do not round Intermedlate calculatlons.) 1. Standard labor-hours allowed 2. Standard labor cost allowed 3. Labor spending variance 4. Labor rate variance Labor efficiency variance
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