Budget Variances, Materials and Labor 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 (4 strips @ $3.00) Direct labor (0.25 hr. @ $15.00) Total prime cost $12.00 3.75 $15.75 During the first month of the year, the Boise plant produced 35,000 belts. Actual leather purchased was 130,000 strips at $3.10 per strip. There were no beginning or ending inventories of leather. Actual direct labor was 37,000 hours at $12.00 per hour. Required: 1. Compute the costs of leather and direct labor that should be incurred for the production of 35,000 leather belts. Materials Labor x