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Budget Variances, Materials and Labor Cinturon Corporation produces high-quality leather belts. The company's plant in Boise uses a star following standards for materials and labor: Leather (5 strips @ $3.00) $15.00 Direct labor (1 hr. @ $14.00) 14.00 Total prime cost $29.00 During the first month of the year, the Boise plant produced 39,000 belts. Actual leather purchased strip. There were no beginning or ending inventories of leather. Actual direct labor was 38,000 hou

Budget Variances, Materials and Labor Cinturon Corporation produces high-quality leather belts. The company's plant in Boise uses a star following standards for materials and labor: Leather (5 strips @ $3.00) $15.00 Direct labor (1 hr. @ $14.00) 14.00 Total prime cost $29.00 During the first month of the year, the Boise plant produced 39,000 belts. Actual leather purchased strip. There were no beginning or ending inventories of leather. Actual direct labor was 38,000 hou

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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: $15.00 Leather (5 strips @ $3.00) Direct labor (1 hr. @ $14.00) Total prime cost $29.00 During the first month of the year, the Boise plant produced 39,000 belts. Actual leather purchased was 110,000 strips at $3.90 per strip. There were no beginning or ending inventories of leather. Actual direct labor was 38,000 hours at $16.00 per hour. Required: 1. Compute the costs of leather and direct labor that should be incurred for the production of 39,000 leather belts. $ $_ 2. Compute the total budget variances for materials and labor. Total Budget Variance $______ $___ Materials Labor 14.00 Materials Labor Favorable Unfavorable
Transcribed Image Text: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: $15.00 Leather (5 strips @ $3.00) Direct labor (1 hr. @ $14.00) Total prime cost $29.00 During the first month of the year, the Boise plant produced 39,000 belts. Actual leather purchased was 110,000 strips at $3.90 per strip. There were no beginning or ending inventories of leather. Actual direct labor was 38,000 hours at $16.00 per hour. Required: 1. Compute the costs of leather and direct labor that should be incurred for the production of 39,000 leather belts. $ $_ 2. Compute the total budget variances for materials and labor. Total Budget Variance $______ $___ Materials Labor 14.00 Materials Labor Favorable Unfavorable
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