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 @ $5.00) $15.00 Direct labor (0.25 hr. $15.00) 3.75 Total prime cost $18.75 During the first month of the year, the Boise plant produced 36,000 belts. Actual leather purchased was 130,000 strips at $3.50 per strip. There were no beginning or ending inventories of leather. Actual direct labor was 32,000 hours at $9.50 per hour. Required: 1. Compute the costs of leather and direct labor that should be incurred for the production of 36,000 leather belts. Materials 5,789 X Labor 22,885 X 2. Compute the total budget variances for materials and labor. Total Budget Variance 22,243 X Favorable Materials $ Labor $ 8,512 X Unfavorable 3. Conceptual Connection: Would you consider these variances material with a need for investigation