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Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared using an elaborate distilling process. The company has developed
Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared using an elaborate distilling process. The company has developed standard costs for one unit of Fludex, as follows Standard Standard Price Standard Quantity or Rate Cost or Hours Direct materials Direct labor Variable manufacturing overhead .60 hours Total standard cost per unit $27.00 per ounce 64.80 7.20 2.10 $ 74.10 2.40 ounces $12.00 per hour $3.50 per hour 0.60 hours During November, the following activity was recorded related to the production of Fludex: a. Materials purchased, 13,000 ounces at a cost of $330,200 b. There was no beginning inventory of materials, however, at the end of the month, 2,850 ounces of material remained in ending C. The company employs 20 lab technicians to work on the production of Fludex. During November, they each worked an average of d. Variable manufacturing overhead is assigned to Fludex on the basis of direct labor-hours. Variable manufacturing overhead costs e. During November, the company produced 4,200 units of Fludex. inventory 160 hours at an average pay rate of $11.00 per hour during November totaled $6,000
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