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pls help Labor Varinnces Onturon Corporation aroduces high-quality leather beits. The company's plant in Bolse uses a standard costing system and has set the following
pls help Labor Varinnces Onturon Corporation aroduces high-quality leather beits. The company's plant in Bolse uses a standard costing system and has set the following standards for materials and iabor: During the firzt 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 leathee. Actual direct labor was 80,300 hours at $13.50 per hour. Regulredt 2. Break down the total variance for labor into a rote variance and an efficiency variance using the columnar and formula approsches. 2. CONCETUAL CONNECTION As part of the investgation of the unfavorable variances, the plant manager interviews the production managen The production manager complains strphgly about the quality of the leather strips. He indicates that the strips are of lower quality than usual and that workers have to be more careful te avoid a belt with crocis and more time is requlred. Also, even with extra care, many belts have to be discarded and new ones procuced to replace the rejects. This replacrment wark has also produced same overtime demands. What corrective action should the plant manager toke? 1. Rueturn to suppliers that provide the quality corresponding to the price standard. 2. Employ more shiled labor at a cost lesser than the savings made by buying cheap material and improve the product quality. 3. There ts no need to change anything. The sales are not affected by this low quality of raw material
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