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) $12.00 Direct labor (0.75 hr. $12) 9.00 Total prime cost $21.00 During the first month of the year, the Boise plant produced 92,000 belts. Actual leather purchased was 287,500 strips at $3.60 per strip. There were no beginning or ending inventories of leather. Actual direct labor was 78,200 hours at $12.50 per hour. Required: 1. Compute the costs of leather and direct labor that should be incurred for the production of 92,000 leather belts, Cost of materials Cost of direct labor 2. Compute the total budget variances for materials and labor. Total Budget Variance Materials $ 6,000 X Favorable Labor Unfavorable 3. Conceptual Connection: Would you consider these variances material with a need for investigation? Previous Next > Check My Work O e 9 52% 43410122 eBook API Calculator Labor Variances Verde Company produces wheels for bicydes. During the year, 661,000 wheels were produced. The actual labor used was 362,000 hours at $9.60 per hour Verde has the following labor standards: 1) $10.40 per hour; 2) 0.49 hour per wheel. Required: 1. Compute the labor rate variance. Favorable 2. Compute the labor efficiency variance. Unfavorable Feedback Check My Work Partially correct Check My Work i 9 52% AD 4 do 12:35 PM signment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inprogress=false * BNP eBook Video Calculator Total Materials Variance Krumple Inc. produces aluminum cans. Production of 15-ounce cans has a standard unit quantity of 4 ounces of aluminum per can. During the month of April, 280,000 cans were produced using 1,500,000 ounces of aluminum. The actual cost of aluminum was $0.17 per ounce and the standard price was $0.06 per Ounce. There are no beginning or ending inventories of aluminum. Required: Calculate the total variance for aluminum for the month of April. Enter amount as a positive number and select Favorable or Unfavorable. Unfavorable Check My Work 1. Compute the actual costs = actual quantity x actual cost per unit; (AQ AP) 2. Compute the standard cost standard quantity (units produced x standard unit quantity) x standard cost per unit; (SQ * SP) 3. Subtract standard costs from the actual costs then determine if the result is favorable or unfavorable Review the "How to Calculate the Total Variance for Materials" example in your text. Previous Check My Work