Direct labor variances for a service company 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 70 of its most popular item, the Breakfast Enchilada. The following data are available for that day: 16 hrs. Quantity of direct labor used (2 employees, working 8 hour shifts) Actual rate for direct labor $14.10 per hr. 0.1 hr. Standard direct labor per meal Standard rate for direct labor $14.50 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. X Open spreadsheet a. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Round your answers to the nearest cent. Direct Labor Rate Variance $ Direct Labor Time Variance $ Direct Labor Cost Variance $ b. Discuss what might have caused these variances. Unfavorable time variance will occur any time the number of meals actually made mobile kitchen. number of meals that could be generated by employees in the F 8 B D E 1 Direct labor variances for a service company 2 3 The following data is provided for Mexicali On the Go Inc.: 4 5 DATA 6 Quantity of direct labor used, hrs 16 7 Number of employees 2 8 Work shift length, hrs 9 Actual rate for direct labor per hr $14.10 10 Standard direct labor per meal, hr 0.1 11 Standard rate for direct labor per hr $14.50 12 Demand 70 13 Using formulas and cell references, perform the required analysis, and input your answers into the green cells in the C column. Select the corresponding type of variance in the dropdowns in cells D17:D19. Remember that favorable variances are negative amounts and unfavorable variances are positive amounts. Transfer the numeric results for the green entry cells (C17:C19) and the 14 selected type of variance in CNOWV2 for grading. 15 16 Amount Type of Variance Formulas 17 a. Direct Labor Rate Variance 18 Direct Labor Time Variance 19 Direct Labor Cost Variance 20 21 22 23 24 25 26