Standard Costs and Variances According to the standard cost card, each helmet should require 0.6 kilograms of plastic, at a cost of $8 per kilogram. Required: According to the standards, what cost for plastic should have been incurred to make 35,000 2. Break down the difference computed in (1) above into a materials price variance and a mate- 1. helmets? How much greater or less is this than the cost that was incurred? rials quantity variance. 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 aroducts is grilled salmon in dill sauce with baby new potatoes and spring vegetables. During the Faost recent week, the company prepared 4,000 of these meals using 960 direct labor-hours. The company paid these direct labor workers a total of $9,600 for this work, or $10.00 per hour. According to the standard cost card for this meal, it should require 0.25 direct labor-hours at a cost of $9.75 per hour. Required: L 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? 2. Break down the difference computed in (1) above into a labor rate variance and a labor effi- ciency variance.
Standard Costs and Variances According to the standard cost card, each helmet should require 0.6 kilograms of plastic, at a cost of $8 per kilogram. Required: According to the standards, what cost for plastic should have been incurred to make 35,000 2. Break down the difference computed in (1) above into a materials price variance and a mate- 1. helmets? How much greater or less is this than the cost that was incurred? rials quantity variance. 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 aroducts is grilled salmon in dill sauce with baby new potatoes and spring vegetables. During the Faost recent week, the company prepared 4,000 of these meals using 960 direct labor-hours. The company paid these direct labor workers a total of $9,600 for this work, or $10.00 per hour. According to the standard cost card for this meal, it should require 0.25 direct labor-hours at a cost of $9.75 per hour. Required: L 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? 2. Break down the difference computed in (1) above into a labor rate variance and a labor effi- ciency variance.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
10-2
![Standard Costs and Variances
According to the standard cost card, each helmet should require 0.6 kilograms of plastic, at a
cost of $8 per kilogram.
Required:
According to the standards, what cost for plastic should have been incurred to make 35,000
2.
Break down the difference computed in (1) above into a materials price variance and a mate-
1.
helmets? How much greater or less is this than the cost that was incurred?
rials quantity variance.
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
aroducts is grilled salmon in dill sauce with baby new potatoes and spring vegetables. During the
Faost recent week, the company prepared 4,000 of these meals using 960 direct labor-hours. The
company paid these direct labor workers a total of $9,600 for this work, or $10.00 per hour.
According to the standard cost card for this meal, it should require 0.25 direct labor-hours at
a cost of $9.75 per hour.
Required:
L 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?
2.
Break down the difference computed in (1) above into a labor rate variance and a labor effi-
ciency variance.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F85e39e9b-3b6a-4fb6-8406-b63a567ff03b%2Fecb8335a-f274-494e-8982-639ec4e1db1d%2F8bqbt3.jpeg&w=3840&q=75)
Transcribed Image Text:Standard Costs and Variances
According to the standard cost card, each helmet should require 0.6 kilograms of plastic, at a
cost of $8 per kilogram.
Required:
According to the standards, what cost for plastic should have been incurred to make 35,000
2.
Break down the difference computed in (1) above into a materials price variance and a mate-
1.
helmets? How much greater or less is this than the cost that was incurred?
rials quantity variance.
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
aroducts is grilled salmon in dill sauce with baby new potatoes and spring vegetables. During the
Faost recent week, the company prepared 4,000 of these meals using 960 direct labor-hours. The
company paid these direct labor workers a total of $9,600 for this work, or $10.00 per hour.
According to the standard cost card for this meal, it should require 0.25 direct labor-hours at
a cost of $9.75 per hour.
Required:
L 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?
2.
Break down the difference computed in (1) above into a labor rate variance and a labor effi-
ciency variance.
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