Compute the costs of leather and direct labor

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Reference no: EM131295421

Budget Variances, Materials and Labor Bolsa 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 (5 strips @ $3.00) $15.00 Direct labor (0.5 hr. @ $12.00) 6.00 Total prime cost $21.00 During the first month of the year, Boise plant produced 49,000 belts. Actual leather purchased was 120,000 strips at $3.20 per strip. There were no beginning or ending inventories of leather. Actual direct labor was 36,000 hours at $10.50 per hour. Required: 1. Compute the costs of leather and direct labor that should be incurred for the production of 49,000 leather belts. Materials $ -204,000 Labor $ 2. Compute the total budget variances for materials and labor. Total Budget Variance Materials $ 384,000 Labor $ 3. Conceptual Connection: Would you consider these variances material with a need for investigation?

Reference no: EM131295421

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