Matt’s Eat ‘N Run has two categories of direct labor, unskilled, which costs $7.50 per hour, and skilled, which costs $15 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. . . . . . . . . . 2 minutes per equivalent meal

Unskilled labor. . . . . . . . 6 minutes per equivalent meal

For the year, Matt’s sold 180,000 equivalent friendly meals and incurred the following labor costs:

Skilled labor . . . . . . . . . . 6,000 hours $ 92,000

Unskilled labor . . . . . . . . 15,000 hours 180,000

Required

a. Compute labor price and efficiency variances.

b. Compute labor mix and yield variances.