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SkyCooks Ltd. prepares in-flight meals for a number of major airlines. One of the company's products is grilled chicken in dill sauce with new
SkyCooks Ltd. prepares in-flight meals for a number of major airlines. One of the company's products is grilled chicken in dill sauce with new baby potatoes and spring vegetables. During the most recent week, the company prepared 4,000 of these meals using 1,000 direct labour-hours. The company paid these workers a total of $10,000 for this work, or $10 per hour. According to the standard cost card for this meal, it should require 0.2 direct labour-hours at a cost of $11 per hour Required: 1-a. How many hours should have been used? Total direct labour hours allowed 1-b. What direct labour cost should have been incurred to prepare the 4,000 meals? Total standard direct labour cost 1-c. How much does this cost vary from what was incurred? What is this variance called? (Indicate the effect of each varlance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (1.e., zero varlance).) Total direct labour variance 2. Break the difference computed in part (1-b) into a labour rate variance and a labour efficiency variance. (Indicate the effect of ach varlance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (Le., zero varlance).) Labour rate variance Labour efficiency variance
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