20. Caballero Corporation produces high-quality leather saddles. The company has a standard cost system and has set the following standards for materials and labor: Leather (20 strips @ $15) 300 Direct Labor (15 hours @ $15) 225 Total prime cost 525

During the year Caballero produced 150 saddles. Actual leather purchased was 3,100 strips, at $12 per strip. There were no beginning or ending inventories of leather. Actual direct labor was 2,500 hours at $16 per hour.

Calculate the labor rate variance and the labor efficiency variance, respectively.

a.

$2,250 U and $4,000 U

b.

$2,500 U and $3,750 U

c.

$2,250 F and $4,000 F

d.

$2,500 F and $3,750 F