Bolsa 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 (5 strips @ $2.00)	$10.00
Direct labor (1 hr. @ $9.00)	9.00
Total prime cost	$19.00

During the first month of the year, Boise plant produced 39,000 belts. Actual leather purchased was 120,000 strips at $3.10 per strip. There were no beginning or ending inventories of leather. Actual direct labor was 36,000 hours at $16.00 per hour.

Required:

1. Compute the costs of leather and direct labor that should be incurred for the production of 39,000 leather belts.

Materials	$
Labor	$

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

	Total Budget Variance
Materials	$
Labor	$

3. Conceptual Connection: Would you consider these variances material with a need for investigation?