Cordero Corporation produces high-quality leather purses. The company uses a standard cost system and has set the following standards for materials and labor: lop5 Leather (6 strips @ $8) $48 Direct labor (1.5 hr @ $12) _18 Total prime cost $66 During the year, Cordero produced 10,000 leather purses. Actual leather purchased was 61,000 strips at $7.96 per strip. There were no beginning or ending inventories of leather. Actual direct labor was 15,600 hours at $12.50 per hour.

Required:

1. Compute the costs of leather and direct labor that should have been incurred for the production of 10,000 leather purses.

2. Compute the total budget variances for materials and labor.

3. Break down the total variance for materials into a price variance and a usage variance.

4. Break down the total variance for labor into a rate variance and an efficiency variance.