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: ins Direct materiale Direct labor Variable manufacturing overhead Total standard cost per unit Standard Quantity or Hours 2.20 ounces 0.50 hours 0.50 hours Standard Price or Rate $25.00 per ounce $15.00 per hour $ 3.00 per hour Standard Cost $55.00 7.50 1.50 $64.00 B During November, the following activity was recorded related to the production of Fiudex Inventory a. Materials purchased, 12,000 ounces at a cost of $282,000. b. There was no beginning inventory of materials; however at the end of the month, 2750 ounces of material remained in ending c. The company employs 25 lab technicians to work on the production of Fiudex. During November, they each worked on average of 110 hours at an average pay rate of $11.50 per hour d. Variable manufacturing overhead is assigned to Fudex on the basis of direct labor hours. Variable manufacturing overhead costs during November totaled $2.400. e During November the company produced 4100 units of Fludex, Required: 1. For direct materials a. Compute the price and quantity variances b. The materials were purchased from a new supplier who is anxious to enter into a long-term purchase contract. Would you recommend that the company sign the contract? 2. For direct labor a. Compute the rate and efficiency variances b. In the past, the 25 technicians employed in the production of Fludex consisted of 5 senior technicians and 20 assistants. During At the end. Retete i ndertimi + aw 3. Compute the variable overhead rate and efficiency variances. Complete this question by entering your answers in the tabs below. Reg 2B Req 1A Reg 18 Reg 2A Reg 3 For direct materials, the materials were purchased from a new supplier who is anxious to enter into a long-term purchase contract. Would you recommend that the company sign the contract? OYes ONO Saved 1 Review Exam 3 requirea: 1. For direct materials: a. Compute the price and quantity variances, b. The materials were purchased from a new supplier who is anxious to enter into a long-term purchase contract. Would you recommend that the company sign the contract? 2. For direct labor a. Compute the rate and efficiency variances. b. In the past, the 25 technicians employed in the production of Fludex consisted of 5 senior technicians and 20 assistants. Duri November, the company experimented with fewer senior technicians and more assistants in order to reduce labor costs. Would recommend that the new labor mix be continued? 3. Compute the variable overhead rate and efficiency variances. Complete this question by entering your answers in the tabs below. Ireq ZA Reg 1A Reg 1B Reg 28 Reg 3 For direct labor, compute the rate and efficiency variances. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (.e., zero variance), Input all amounts as positive values.) Labor rate variance Labor efficiency variance Required: 1. For direct materials: a. Compute the price and quantity variances. b. The materials were purchased from a new supplier who is anxious to enter into a long-term purchase contract. Would you recommend that the company sign the contract? 2. For direct labor: a Compute the rate and efficiency variances. b. In the past, the 25 technicians employed in the production of Fludex consisted of 5 senior technicians and 20 assistants. During November, the company experimented with fewer senior technicians and more assistants in order to reduce labor costs. Would you recommend that the new labor mix be continued? 3. Compute the variable overhead rate and efficiency variances Complete this question by entering your answers in the tabs below. Reg 1A Reg 18 Reg 2A tinq 28 Reg 3 In the past, the 25 technicians employed in the production of Fludex consisted of 5 senior technicians and 20 assistants. During November, the company experimented with fewer senior technicians and more assistants in order to reduce labor costs. Would you recommend that the new labor mix be continued? Yes ONO ( Req 2A Req3 > Requirea: 1. For direct materials: a. Compute the price and quantity variances. b. The materials were purchased from a new supplier who is anxious to enter into a long-term purchase contract. Would yo recommend that the company sign the contract? 2. For direct labor: a. Compute the rate and efficiency variances. b. In the past, the 25 technicians employed in the production of Fludex consisted of 5 senior technicians and 20 assistants November, the company experimented with fewer senior technicians and more assistants in order to reduce labor costs. recommend that the new labor mix be continued? 3. Compute the variable overhead rate and efficiency variances, Complete this question by entering your answers in the tabs below. Reg 1A Req 18 Reg 2A Reg 2B Reg 3 Compute the variable overhead rate and efficiency variances. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (1.e., zero variance). Input all amounts as positive values.) Variable overhead rate variance Variable overhead efficiency variance
