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:

Leather (3 strips @ $6)................................... $18.00
Direct labor ...........................(0.75 hr. @ $16) 12.00
Total prime cost ..............................................$30.00

During the first month of the year, the Boise plant produced 92,000 belts. Actual leather purchased was 287,500 strips at $5.40 per strip. There was no beginning or ending inventories of leather. Actual direct labor was 78,200 hours at $16.50 per hour.

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:

Leather..................................................... (3 strips @ $6) $18.00
Direct labor............................................. (0.75 hr. @ $16) 12.00
Total prime cost................................................................ $30.00

During the first month of the year, the Boise plant produced 92,000 belts. Actual leather purchased was 287,500 strips at $5.40 per strip. There was no beginning or ending inventories of leather. Actual direct labor was 78,200 hours at $16.50 per hour.Refer to the information for Cinturon Corporation above.

Required:
1. Compute the costs of leather and direct labor that should be incurred for the production of 92,000 leather belts.
2. Compute the total budget variances for materials and labor.
3. Would you consider these variances material with a need for investigation? Explain.
4. Refer to Exhibit 2.2 for a description of data analytic types. What data analytic type is used in Requirements 1, 2, and 3? Explain.

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Data Analytic Question Answered Management Accounting Analysis Example Type Descriptive What is happening? Diagnostic Predictive Prescriptive Create a profit and loss analysis of current products (games, virtual reality headsets, controllers) based on historical financial performance data. Why is it happening? Conduct an analysis that identifies the drivers of customers' most valued particular product preferences (features, platforms, consoles, multi- player capabilities). What is likely to happen? Forecast the financial impact (in terms of lost revenue) from the risk that competitors introduce new games with innovative and popular features. What do I need to do? Build a model that informs employees about specific choices to make across the value chain (from game design to distribution to marketing to aftermarket customer interfaces) to optimize profitability.