Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Rudex, is prepared using an elaborate distilling process. The company has developed standard costs for one unit of Fludex, as follows: Standard Quantity or Hours 2.50 ounces 0.50 hours 0.50 hours Standard Price or Rate $28.00 per Ounce $13.00 per hour $ 3.60 per hour Standard Cost 570.00 Direct materials Direct labor Variable manufacturing overhead Total standard cost per unit 6.50 1.80 $78.30 During November, the following activity was recorded related to the production of Flucex a. Materials purchased, 13.500 ounces at a cost of $361.800. b. There was no beginning inventory of materials; however, at the end of the month 2,900 ounces of material remained in ending inventory c. The company employs 21 tab technicians to work on the production of Fludex. During November, they each worked an average of 140 hours at an average pay rate of $11.50 per hour Variable manufacturing overhead is assigned to Fiudex on the basis of direct labor-hours. Variate manufacturing overhead costs during November totaled $4,400 e. During November, the company produced 4,200 units of Fludex, Required: 1. For direct materins: 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? 3 30 points 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 Compute the rate and efficiency variances. to in the past, the 21technicians employed in the production of ludex consisted of 3 senior technicians and 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 labore be continued 3. Compute the variable overhead rate and efficiency variances Complete this question by entering your answers in the tabs below. RGIA les 10 Reg 2 For direct materials, compute the price and quantity variances Indicate the wifect of each wariance by secting tavou for unfavorable, and one for no effect here are not all amountain Valls Mape variance Mastetaan TE Next 33 M 22 Next 30 Doints 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 21 technicians employed in the production of Fludex consisted of 3 senior technicians and 18 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. who PE Complete this question by entering your answers in the tabs below. Red IA Reg 18 Reg 2 Reg 2 Re Compute the variable overhead rate and efficiency variances. (Indicate the effect of each variance by selecting for favorable, "U" for unfavorable, and "None' for no effectie, Tero variance Input amounts as positive values Variable date variance Variation officiency variance Res 20
