Budget Variances, Materials and Labor Cinturon Corporation produces high-quality leather belts. The company's plant in B

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Budget Variances, Materials and Labor
Cinturon Corporation produces high-quality leather belts. The
company's plant in Boise uses a standard costing system and has set
the following standards for materials and labor:
During the first month of the year, the Boise plant produced
42,000 belts. Actual leather purchased was 140,000 strips at $3.60
per strip. There were no beginning or ending inventories of
leather. Actual direct labor was 31,000 hours at $16.50 per
hour.
Required:
1. Compute the costs of leather and
direct labor that should be incurred for the production of 42,000
leather belts.
2. Compute the total budget variances for
materials and labor.
FavorableUnfavorable
FavorableUnfavorable
3. Conceptual Connection: Would you
consider these variances material with a need for
investigation?
YesNo