Question

Direct Labor Variances for a Service Company Hit-n-Run Food Trucks, 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, Jose O'Brien's Mobile Fiesta, specializes in Irish-Mexican fusion cuisine. The truck offers a single menu item that changes daily. On November 11, the truck prepared 200 of its most popular item, the Irish Breakfast Enchilada. The following data are available for that day: Quantity of direct labor used 24 hrs. (3 employees, working 8 hour shifts) Actual rate for direct labor $15.00 per hr. Standard direct labor per meal 0.1 hr. Standard rate for direct labor $15.50 per hr. 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. Direct Labor Rate Variance $ Direct Labor Time Variance $ Total Direct Labor Cost Variance $ b. Discuss what might have caused these variances.

Answer 1

Step-by-step explanation:

The solution is given below check the picture attached for better explanation

Direct labour rate variance:

=(Actual rate per hour-standard rate per hour)×actual hours

=($15-$15.50)×24 hours

=$12 F

2.

Direct labourTime variance:

=(Actual direct labour hour-standard direct labour hours)×standard rate per hour

={24-(200×.10)}×15.50

=$62 U

3. Total direct labour cost variance=direct labour rate variance+direct labour time variance

=310-360

=$50 U