Question: A firm has two labor inputs for its finished goods units: Worker Type A and Worker Type B. Typically the firm uses 2 hours of

A firm has two labor inputs for its finished goods units: Worker Type A and Worker Type B. Typically the firm uses 2 hours of Worker Type A for every 3 hours of Worker Type B. The firm produces 10 finished goods for every 5 hours of labor.

  • Worker A standard price is $25.00 per hour
  • Worker B standard price is $16.00 per hour
  • Worker A actual price is $30.00 per hour
  • Worker B actual price is $20.00 per hour

This period, the firm instead actually used 6,000 hours of Worker Type A and 4,000 hours of Worker B (producing 20,000 units of finished goods).

What is the firm's mix variance for this product this period (round to nearest cent if necessary)?

a.

$20,000 unfavorable

b.

$18,000 unfavorable

c.

$20,000 favorable

d.

$18,000 favorable

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