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Materials Variances Cinturon Corporation produces high-quality leather belts. The company's plant in Boise uses a standard costing system and has set...
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# Materials Variances

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)\$12.00Direct labor (0.75 hr. @ \$12)9.00Total prime cost\$21.00

During the first month of the year, Boise plant produced 92,000 belts. Actual leather purchased was 297,500 strips at \$3.60 per strip. There were no beginning or ending inventories of leather. Actual direct labor was 78,400 hours at \$15.00 per hour.

Required:

Break down the total variance for materials into a price variance and a usage variance using the columnar and formula approaches. If required, enter favorable values as negative numbers.

Price variance\$_____________Favorable

Usage variance\$____________Unfavorable

Total variance\$_______________Favorable

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