Managerial Accounting
15th Edition
ISBN: 9781337912020
Author: Carl Warren, Ph.d. Cma William B. Tayler
Publisher: South-Western College Pub
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Chapter 9, Problem 11E
a.
To determine
Compute the direct labor rate variance, the direct labor time variance, and the total direct labor cost variance.
b.
To determine
Discuss the reason for the cause of the variances.
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Mexicali On the Go Inc. owns and operates food trucks (mobile kitchens) throughout the west coast. The company’s employees have varying wage levels depending on their experience and length of time with the company. Employees work 8-hour shifts and are assigned to a truck each day based on labor needs to support the daily menu. One of its trucks, Donna’s Mobile Fiesta offers a single menu item that changes daily. On May 6, the truck prepared 80 of its most popular item, the Breakfast Enchilada. The following data are available for that day:
Quantity of direct labor used
16 hrs.
(2 employees, working 8 hour shifts)
Actual rate for direct labor
$13.20 per hr.
Standard direct labor per meal
0.1 hr.
Standard rate for direct labor
$13.70 per hr.
This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.
Open spreadsheet
Determine the direct…
Acc
Hit-n-Run Food Trucks, Inc. owns and operates food trucks (mobile kitchens) throughout the west coast. The company’s employees have varying wage levels depending on their experience and length of time with the company. Employees work 8-hour shifts and are assigned to a truck each day based on labor needs to support the daily menu. One of its trucks, Jose O’Brien’s Mobile Fiesta, specializes in Irish-Mexican fusion cuisine. The truck offers a single menu item that changes daily. On November 11, the truck prepared 200 of its most popular item, the Irish Breakfast Enchilada. The following data are available for that day:
Cost Driver
Amount
Quantity of direct labor used
(3 employees, working 8 hour shifts)
24 hrs.
Actual rate for direct labor
$15.00 per hr.
Standard direct labor per meal
.1 hr.
Standard rate for direct labor
$15.50 per hr.
Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance.
In…
Chapter 9 Solutions
Managerial Accounting
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