Question

Matt's Eat & Run has two categories of direct labor: unskilled, which costs $22 per hour, and skilled which cost $38 per hour. Management has established standards per "equilivant friendly meal," which has been definied as a typical meal conisting 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 sold 198,000 equivalent friendly meals and incurred the following labor cost:

Skilled labor 9,900 hours     $383,000

Unskilled labor 10,000 hours $261,000

Compute labor mix and yield variances. (please explain how to do this)

Answer 1