SkyChefs, Incorporated, prepares in-flight meals for a number of major airlines. One of the company's products is grilled salmon with mixed 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-hour at a cost of $9.20 per hour. Required: 1. What is the standard labor-hours allowed (SH) to prepare 6,300 meals? 2. What is the standard labor cost allowed (SH x SR) to prepare 6,300 meals? 3. What is the labor spending variance?
SkyChefs, Incorporated, prepares in-flight meals for a number of major airlines. One of the company's products is grilled salmon with mixed 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-hour at a cost of $9.20 per hour. Required: 1. What is the standard labor-hours allowed (SH) to prepare 6,300 meals? 2. What is the standard labor cost allowed (SH x SR) to prepare 6,300 meals? 3. What is the labor spending variance?
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![### Cost and Variance Analysis for In-Flight Meal Preparation
**Scenario:**
SkyChefs, Incorporated, prepares in-flight meals for major airlines. The company recently produced 6,300 grilled salmon meals with mixed vegetables, requiring 1,800 direct labor-hours. Workers were paid a total of $18,000, equating to $10.00 per hour. The standard cost card indicates a requirement of 0.30 labor-hours per meal, costing $9.20 per hour.
---
**Required Calculations:**
1. **Standard Labor-Hours Allowed (SH):**
- Formula: Number of meals × Standard hours per meal
- Calculation: 6,300 meals × 0.30 hours/meal
2. **Standard Labor Cost Allowed (SH × SR):**
- Formula: Standard labor-hours allowed × Standard rate
- Calculation: SH × $9.20/hour
3. **Labor Spending Variance:**
- Formula: Actual labor cost - Standard labor cost allowed
- Calculation: $18,000 - (SH × $9.20)
4. **Labor Rate and Efficiency Variance:**
- **Labor Rate Variance:**
- Formula: (Actual rate - Standard rate) × Actual hours
- Calculation: ($10.00/hour - $9.20/hour) × 1,800 hours
- **Labor Efficiency Variance:**
- Formula: (Actual hours - Standard hours allowed) × Standard rate
- Calculation: (1,800 hours - SH) × $9.20/hour
**Indicate the effect of each variance**:
- **F** for favorable: when actual costs are less than standard.
- **U** for unfavorable: when actual costs exceed standard.
- **None** for zero variance.
---
### Variance Summary Table
| **Item** | **Amount** | **Effect** (F, U, None) |
|---------------------------------|--------------------|--------------------------|
| 1. Standard labor-hours allowed | [Insert Value] | |
| 2. Standard labor cost allowed | [Insert Value] | |
| 3. Labor spending variance | [Insert Value] | |
| 4. Labor rate variance | [Insert Value] | |
| 5. Labor efficiency variance | [Insert Value] | |](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F84be77e3-7e2a-48d9-923c-45508700aa71%2Fd5c0387f-9a48-477e-887c-a33a8c44d43a%2F7151kxk_processed.png&w=3840&q=75)
Transcribed Image Text:### Cost and Variance Analysis for In-Flight Meal Preparation
**Scenario:**
SkyChefs, Incorporated, prepares in-flight meals for major airlines. The company recently produced 6,300 grilled salmon meals with mixed vegetables, requiring 1,800 direct labor-hours. Workers were paid a total of $18,000, equating to $10.00 per hour. The standard cost card indicates a requirement of 0.30 labor-hours per meal, costing $9.20 per hour.
---
**Required Calculations:**
1. **Standard Labor-Hours Allowed (SH):**
- Formula: Number of meals × Standard hours per meal
- Calculation: 6,300 meals × 0.30 hours/meal
2. **Standard Labor Cost Allowed (SH × SR):**
- Formula: Standard labor-hours allowed × Standard rate
- Calculation: SH × $9.20/hour
3. **Labor Spending Variance:**
- Formula: Actual labor cost - Standard labor cost allowed
- Calculation: $18,000 - (SH × $9.20)
4. **Labor Rate and Efficiency Variance:**
- **Labor Rate Variance:**
- Formula: (Actual rate - Standard rate) × Actual hours
- Calculation: ($10.00/hour - $9.20/hour) × 1,800 hours
- **Labor Efficiency Variance:**
- Formula: (Actual hours - Standard hours allowed) × Standard rate
- Calculation: (1,800 hours - SH) × $9.20/hour
**Indicate the effect of each variance**:
- **F** for favorable: when actual costs are less than standard.
- **U** for unfavorable: when actual costs exceed standard.
- **None** for zero variance.
---
### Variance Summary Table
| **Item** | **Amount** | **Effect** (F, U, None) |
|---------------------------------|--------------------|--------------------------|
| 1. Standard labor-hours allowed | [Insert Value] | |
| 2. Standard labor cost allowed | [Insert Value] | |
| 3. Labor spending variance | [Insert Value] | |
| 4. Labor rate variance | [Insert Value] | |
| 5. Labor efficiency variance | [Insert Value] | |
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