Labor Variances Verde Company produces wheels for bicycles. During the year, 661,000 wheels were produced. The actual labor used was 366,000 hours at $9.30 per hour. Verde has the following labor standards: 1) $10.00 per hour; 2) 0.46 hour per wheel. Required: 1. Compute the labor rate variance. $ 256,200 Favorable 2. Compute the labor efficiency variance. 355,000 X Unfavorable Materials Variances Cinturon Corporation produces high-quality leather belts. The company's plant in Boise uses 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 278,500 strips at $3.30 per strip. There were no beginning or ending inventories of leather. Actual direct labor was 80,000 hours at $13.00 per hour. Required: