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 (5 strips @ $5.00) $25.00 Direct labor (1.25 hr. @ $8.00) 10.00 Total prime cost $35.00 During the first month of the year, the Boise plant produced 31,000 belts. Actual leather purchased was 110,000 strips at $3.20 per strip. There were no beginning or ending inventories of leather. Actual direct labor was 30,000 hours at $16.00 per hour. Required: 1. Compute the costs of leather and direct labor that should be incurred for the production of 31,000 leather belts. Materials $fill in the blank 1 Labor $fill in the blank 2 2. Compute the total budget variances for materials and labor. Total Budget Variance Materials $fill in the blank 3 Labor $fill in the blank 5 3. Conceptual Connection: Would you consider these variances material with a need for investigation?