1.) SkyChefs, Inc., prepares in-flight meals for a number of major airlines. One of the companys products is grilled salmon in dill sauce with baby new potatoes and spring vegetables. During the most recent week, the company prepared 7,000 of these meals using 2,700 direct labor-hours. The company paid its direct labor workers a total of $27,000 for this work, or $10.00 per hour.

According to the standard cost card for this meal, it should require 0.40 direct labor-hours at a cost of $9.30 per hour.

Required:

1. What is the standard labor-hours allowed (SH) to prepare 7,000 meals?

2. What is the standard labor cost allowed (SH SR) to prepare 7,000 meals?

3. What is the labor spending variance?

4. What is the labor rate variance and the labor efficiency variance?

(For requirements 3 and 4, indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Do not round intermediate calculations.)

2.)

The Gourmand Cooking School runs short cooking courses at its small campus. Management has identified two cost drivers it uses in its budgeting and performance reportsthe number of courses and the total number of students. For example, the school might run two courses in a month and have a total of 62 students enrolled in those two courses. Data concerning the companys cost formulas appear below:

	Fixed Cost per Month		Cost per Course		Cost per Student
Instructor wages			$	2,950
Classroom supplies					$	290
Utilities	$	1,240	$	55
Campus rent	$	5,200
Insurance	$	2,400
Administrative expenses	$	3,800	$	40	$	6

For example, administrative expenses should be $3,800 per month plus $40 per course plus $6 per student. The companys sales should average $860 per student.

The company planned to run four courses with a total of 62 students; however, it actually ran four courses with a total of only 54 students. The actual operating results for September appear below:

	Actual
Revenue	$	50,420
Instructor wages	$	11,080
Classroom supplies	$	17,830
Utilities	$	1,870
Campus rent	$	5,200
Insurance	$	2,540
Administrative expenses	$	3,758

Required:

1. Prepare the companys planning budget for September.

2. Prepare the companys flexible budget for September.

3. Calculate the revenue and spending variances for September.

3.)

Dawson Toys, Ltd., produces a toy called the Maze. The company has recently created a standard cost system to help control costs and has established the following standards for the Maze toy:

Direct materials: 7 microns per toy at $0.34 per micron

Direct labor: 1.2 hours per toy at $7.20 per hour

During July, the company produced 4,900 Maze toys. The toy's production data for the month are as follows:

Direct materials: 70,000 microns were purchased at a cost of $0.32 per micron. 27,125 of these microns were still in inventory at the end of the month.

Direct labor: 6,280 direct labor-hours were worked at a cost of $49,612.

Required:

1. Compute the following variances for July: (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Do not round intermediate calculations. Round final answers to the nearest whole dollar amount.)

a. The materials price and quantity variances.

b. The labor rate and efficiency variances.

4.)

You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The president has asked that you review the companys costing system and do what you can to help us get better control of our manufacturing overhead costs. You find that the company has never used a flexible budget, and you suggest that preparing such a budget would be an excellent first step in overhead planning and control.

After much effort and analysis, you determined the following cost formulas and gathered the following actual cost data for March:

	Cost Formula	Actual Cost in March
Utilities	$17,000 plus $0.21 per machine-hour	$	22,370
Maintenance	$38,900 plus $2.00 per machine-hour	$	66,700
Supplies	$0.70 per machine-hour	$	11,700
Indirect labor	$94,800 plus $1.90 per machine-hour	$	128,000
Depreciation	$68,100	$	69,800

During March, the company worked 15,000 machine-hours and produced 9,000 units. The company had originally planned to work 17,000 machine-hours during March.

Required:

1. Prepare a flexible budget for March.

2. Prepare a report showing the spending variances for March.