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SkyChefs, Inc., prepares in-flight meals for several airlines. One of the meals is grilled salmon in dill sauce with baby new potatoes and spring vegetables.
SkyChefs, Inc., prepares in-flight meals for several airlines. One of the meals is grilled salmon in dill sauce with baby new potatoes and spring vegetables. During the most recent week, the company prepared 4,000 of these meals using 960 direct labor-hours. The company paid these direct labor workers a total of $9,600 for this work, or $10.00 per hour. According to the standard cost card for this meal, it should require 0.25 direct labor-hours at a cost of $9.75 per hour.
- Determine the spending variance on direct labor for the week and whether it was favorable (F) or unfavorable (U).
- Break down the spending variance above into a labor rate variance and a labor efficiency variance and whether each was favorable (F) or unfavorable (U).
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