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.$1,563(U)

b.$3,750(F)

c.$3,750(U)

d.$1,563(F)