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 $(3$ strips @ $$4\mathrm{.}00)$ $$12\mathrm{.}00$

Direct labor $(0\mathrm{.}5$ hr$.$ @ $$14\mathrm{.}00)7\mathrm{.}00$

Total prime cost $$19\mathrm{.}00$

During the first month of the year, the Boise plant produced $35,000$ belts. Actual leather purchased was $100,000$ strips at $$3\mathrm{.}00$ per strip. There were no beginning or ending inventories of leather. Actual direct labor was $33,000$ hours at $$13\mathrm{.}50$ 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 $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 $3$

Favorable

Labor $fill in the blank $5$

Unfavorable

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

Yes