Managerial Accounting

SkyChefs, lnc., prepares in-flight meals for a number of major airlines. One ofthe company's products is grilled salmon with new potatoes and mixed vegetables. During the most recent week, the company prepared 4,000 of these meals using 750 direct labor hours. The company paid its direct labor workers a total of $6,000 for this work, or $8.00 per hour. According to the standard cost card for this meal, it should require 0.20 direct labor-hours at a cost of $7.00 per hour. Required: 1. What is the standard laborhours allowed (SH) to prepare 4,000 meals? 2. What is the standard labor cost allowed (SH x SR) to prepare 4,000 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.) Standard labor-hours allowed Standard labor cost allowed Labor spending variance PWN.' Labor rate variance Labor efciency variance 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 61 students enrolled in those two courses. Data concerning the company's cost formulas appear below: Fixed Cost Cost per Cost per per Month Course Student Instructor wages $ 2.970 Classroom supplies $270 Utilities $1,250 513 85 Campus rent $ 4,800 Insurance 85 2.100 Administrative expenses $3,900 35 44 $ 7 i For example, administrative expenses should be $3,900 per month plus $44 per course plus $7 per student. The company's sales should average $850 per student. The company planned to run four courses with a total of 61 students; however, it actually ran four courses with a total of only 57 students. The actual operating results for September were as follows: Actual Revenue $ 48.950 Instructor wages $ 1 1,160 Classroom supplies $ 16.320 Utilities $ 2,000 Campus rent 53 4.800 Insurance 55 2,240 Administrative expenses $ 3.929 Required: Prepare a flexible budget performance report that shows both revenue and spending variances and activity variances for September. (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.) Students Revenue Expenses: Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Total expense 8501------ Net operating income