Question
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:
During November, the following activity was recorded related to the production of Fludex:
- Materials purchased, 11,000 ounces at a cost of $237,600.
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There was no beginning inventory of materials; however, at the end of the month, 2,650 ounces of material remained in ending inventory.
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The company employs 18 lab technicians to work on the production of Fludex. During November, they each worked an average of 190 hours at an average pay rate of $10.50 per hour.
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Variable manufacturing overhead is assigned to Fludex on the basis of direct labor-hours. Variable manufacturing overhead costs during November totaled $6,200.
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During November, the company produced 3,750 units of Fludex.
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