Materials Variances: Cinturen Corporation produces high-quality leather belts. The company's plant in bolse uses a standsrd costing system and has sec the following standards for materials and tabor: During the first month of the year, the Boise plant produced 92,000 belts. Actual leather purchased was 271,500 strips at 53.60 per strip. There were no beginning or. ending inventories of leather. Actual direct tabor was 78,200 hours at $12,50 per hour. Required: 1. Break down the total vaniance for materials into a price variance and a usage variance using the columinar and formula approaches Enter favorable values as negotive numbers and unfavorable valuns as positive numbers. 2. CONCEPTUAL CONNECTION SUppose the Bolse plant manoger investigates the matenals variances and is told by the purchasing manager that a cheaper source of leather strips had been discovered and that this is the reason for the favorable materials price variance. Quite pleased, the purchasing manager suggests that the materials price standard be updated to reflect this new, less expensive source of leather strips. Should the plant manager update the materiais price standard as suggested? Why or why not? 1. No, The suggestion of the purchasing manoger is premature. A favorable materials price can produce an effect on both materials usage and labor variances. 2. Yes, the purchasing manager is correct. This will improve the overall profitability of the company, 3. No, The suggestion of the purchasing manager is incorrect. The matierals are not available and so changes to the price standard should not be made