Question
A firm has two labor inputs for its finished goods units: Worker Type A and Worker Type B. Typically the firm uses 2 hours of
A firm has two labor inputs for its finished goods units: Worker Type A and Worker Type B. Typically the firm uses 2 hours of Worker Type A for every 3 hours of Worker Type B. The firm produces 10 finished goods for every 5 hours of labor.
- Worker A standard price is $25.00 per hour
- Worker B standard price is $16.00 per hour
- Worker A actual price is $30.00 per hour
- Worker B actual price is $20.00 per hour
This period, the firm instead actually used 6,000 hours of Worker Type A and 4,000 hours of Worker B (producing 20,000 units of finished goods).
What is the firm's mix variance for this product this period (round to nearest cent if necessary)?
a. | $20,000 unfavorable | |
b. | $18,000 unfavorable | |
c. | $20,000 favorable | |
d. | $18,000 favorable |
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