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 79,100 hours at $13.00 per hout Required: 1. Ereak down the total variance for labse into a rate variance and an efficiency variance using the columnar and formula approaches. 2. CONCEPTUAL CONNECTION As part of the investigation of the unfavorable variances, the plant manager interviews the production manager. The production manager complains strongly about the quality of the leather strips. He indicotes that the strips are of lower qualty than usual and that warkers have to be more careful to avoid a beit with cracks and moretime is requirod. Also, even with extra care, many belts have to be discarded and new ones produced to replace the rejects. This replacement. work has also produced some overtime demands. What corrective action sheuld the plant manager take? 1. Return to suppliers that provide the quality corresponding to the price standard. 2. Employ more skilled labor at a cost lesser than the savings made by buying cheap material and improve the product quality. 3. There is no need to change anyening. The sales are not affected by this low quality of raw material