A B C SkyChefs Inc prepares inflight meals for a number of m

A.

B.

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SkyChefs, Inc., prepares in-flight 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 5,100 of these meals using 2,000 direct labor-hours. The company paid these direct labor workers a total of $28,000 for this work, or $14.00 per hour According to the standard cost card for this meal, it should require 0.40 direct labor-hours at a cost of $13.50 per hour. Required: 1. According to the standards, what direct labor cost should have been incurred to prepare 5,100 meals? How much does this differ from the actual direct labor cost? Round labor-hours per meal and labor cost per hour to 2 decimal places.) Number of meals prepared Standard direct labor-hours per meal Total direct labor-hours allowed Standard direct labor cost per hour Total standard direct labor cost Actual cost incurred Total standard direct labor cost Total direct labor variance 2. Break down the difference computed in (1) above into a labor rate variance and a labor efficiency variance. (Indicate the effect of each variance by selecting \"F\" for favorable, \"U\" for unfavorable, and \"None\" for no effect i.e., zero variance).) Labor rate variance Labor efficiency variance

Solution

A) According to standard calculate material variance :

2. Break down difference :

Labour rate variance = (Standard rate-actual rate)actual hours

= (13.50-14)2000

Labour rate variance = 1000 Unfavourable

Labour efficiency variance = (Standard hour-actual hour)standard rate

= (2040-2000)13.50

Labour efficiency variance = 540 Favourable

Number of meals prepared	5100
Standard direct labour hours per meal	0.40
Total labour hours allowed	2040
Standard rate per hour	13.50
Standard labour cost	27540
Actual cost incurred	28000
Total standard labour cost	27540
Labour variance	460 Unfavourable