Bortello Corporation produces high-quality leather boots. The company has a standard cost system and has set the following standards for materials and labor:

Leather (12 strips @ $20)$240

Direct labor (10 hours @ $12)$120

Total prime cost$360

During the year Bortello produced 125 boots. Actual leather purchased was 1,700 strips, at $16 per strip. There were no beginning or ending inventories of leather. Actual direct labor was 1,500 hours at $15 per hour.

Refer to Figure 10-3. Compute the costs of leather and direct labor that should have been incurred for the production of 125 boots.

$36,000 and $36,000$46,500 and $37,500$37,200 and $20,000$30,000 and $15,000