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 6,300 of these meals using 1.800 direct labor-hours. The company paid these direct labor workers a total of $18,000 for this work, or $10.00 per hour. According to the standard cost card for this meal, it should require 0.30 direct labor-hours at a cost of 59.20 per hour. Required: 1. According to the standards, what direct labor cost should have been incurred to prepare 6,300 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 Sharp Company manufactures a product for which the following standards have been set: Standard Quantity Standard Price Standard or Hours or Rate Cost Direct materials 3 feet $5 per foot $15 Direct labor ? hours ? per hour 2 During March, the company purchased direct materials at a cost of $60.120. all of which were used in the production of 3,200 units of product In addition, 4,800 hours of direct labor time were worked on the product during the month. The cost of this labor time was $53,900. The following variances have been computed for the month: Materials quantity variance Labor spending variance Labor efficiency variance $2,100 U $3.500 U $1,050 U Required: 1. For direct materials: 2. Compute the actual cost per foot for materials for March. (Round your answer to 2 decimal places. Actual cost per foot b. Compute the price variance and the spending variance. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect i.e., zero variance) Price variance Spending variance 2. For direct labor: (Do not round intermediate calculations.) a Compute the standard direct labor rate per hour. {Round your final answer to 2 decimal places.) Standard direct labor rate per hour b. Compute the standard hours allowed for the month's production Standard hours hours c. Compute the standard hours allowed per unit of product. (Round your answer to 1 decimal place.) Standard hours hours per unit
