In: Accounting
Matt's Eat 'N Run has two categories of direct labor: unskilled, which costs $11 per hour, and skilled, which costs $22 per hour. Management has established standards per "equivalent friendly meal," which has been defined as a typical meal consisting of a hamburger, a drink, and french fries. Standards have been set as follows:
Skilled labor | 3 | minutes per equivalent meal |
Unskilled labor | 7 | minutes per equivalent meal |
For the year, Matt’s sold 181,000 equivalent friendly meals and incurred the following labor costs:
Skilled labor | 9,050 | hours | $ | 204,200 | ||
Unskilled labor | 15,100 | hours | 240,200 | |||
Required:
a. Compute labor price and efficiency variances. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.)
b. Compute labor mix and yield variances. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.)