Labor Variances Cinturon Corporation produces high-quality leather belts. The compary's plant in Bolse usos a standard costing system and has ser the following standonds for materiabs and labor: During the first month of the yeac, the Bolse plant produced 92,000 belts, Actual leather purchased was 287,500 strips at 53.60 per strin. There were no beg inning or ending inventorles of leather. Actual direct labor was 80,300 hours at $13.50 per hour, Required: 1. Break down the total variance for labor 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 maragec. The production manager complains strongly about the quality of the leather strips. He indieates that the strips are of lower quality than usual and that workers have to be mere caresil to avald a belt with cracks and more time is required. Also, even with extra care, many belts have to be discarded and nem ones produced to replace the rebects, This replacement work has also produced some overtime demands. What corrective action should the plant manaper take? 1. Raturn 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 biying cheap material and improve the product quality. 3. There is no need to change anything. The sales are not affected by this low quatity of raw materiat