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Montecino Corporation uses two different types of labor to manufacture its product. The types of labor, Cutting and Setup, have the following standards: Labor Type

Montecino Corporation uses two different types of labor to manufacture its product. The types of labor, Cutting and Setup, have the following standards:

Labor Type Standard Mix Standard Unit Price Standard Cost
Cutting 500 hours $7.50 per unit $3,750
Setup 125 hours 5.00 per unit $ 625
Yield 3,125 units

During July, the following actual production information was provided:

Labor Type Actual Mix
Cutting 4,375 hours
Setup 1,875 hours
Yield 28,125 units

What is the Labor mix variance?

a.$3,750(U)

b.$1,563(F)

c.$3,750(F)

d.$1,563(U)

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