Budget Variances, Materials and Labor Cinturon Corporation produces high-quality leather belts. The company's plant in Boise uses a 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 287,500 strips at $3.60 per strip. There were no beginning or ending Inventories of leather. Actual direct labor was 78,200 hours at $12.50 per hour Required: 1. Compute the costs of leather and direct labor that should be incurred for the production of 92,000 leather belts Cost of materials Cost of direct labor 2. Compute the total budget variances for materials and labor Total Budget Variance Materials Labor 3. Conceptual Connection would you consider these variances material with a need for investigation? Variable Overhead Variances, Service Company Rostand Inc. operates a delivery service for over 70 restaurants. The corporation has a fleet of vehicles and has invested in a sophisticated, computerized communications system to coordinate its deliveries. Rostand has gathered the following actual data on last year's deillvery operations Deliveries made 38,600 Direct labor 31,000 direct labor hours $14.00 Actual variable overhead $157,700 Rostand employs a standard costing system. During the year, a variable overhead rote of $5.10 per hour was used. The labor standard requires 0.00 hour per delivery Required: 1. Compute the standard hours allowed for actual deliveries made fast year direct labor hours 2. Compute the variable overhead spending and efficiency variantots. Enter amounts as positive numbers and select Favorable or Unfavorable Spending variance Effidency variance