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Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared using an elaborato distilling process. The company has developed

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Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared using an elaborato distilling process. The company has developed standard costs for one unit of Fludex, as follows dard 2 50 ounces 0.70 hours 0.70 hours Direct materials Direct labor Variable manufacturing overhead $19.00 per ounce $47.50 $15.00 per hour 10.50 2.80 $60.80 4.00 per hour During November, the following activity was recorded relative to production of Fludex: a. Materials purchased, 12,500 ounces at a cost of $223,125 b. There was no beginning inventory of materials; however, at the end of the month, 3,250 ounces of material remained in ending inventory c. The company employs 21 lab technicians to work on the production of Fludex. During November, they worked an average of 150 hours at an average rate of $12.50 per hour d. Variable manufacturing cverhead is assigned to Fludex on the basis of direct labor-hours. Variable manufacturing overhead costs during November totaled $5, 100 e. During November, 3,500 good units of Fludex were produced Required: 1. For direct materials: for unfavorable, and a compute the price and quantity variances (input all amounts as positive values. Indicate the effect of each variance by selecting for favorable, None for no effect (Le, zero variance)) Materials price variance Materials quantity variance 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? O Yes O No 2. For direct labor a. Compute the rate and efficiency variances. (Input all amounts as positive values. Indicate the effect of each varlance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (Ie, zero variance).) Labor rate variance Labor efficiency variance experimented with fewer senior the 21 technicians employed in the production of Fludex consisted of 4 senior technicians and 17 assistants. During November, the company e technicians and more assistants in order to save costs. Would you recommend that the new labor mix be continued? O Yes 3. Compute the variable overhead rate and efficiency variances. (Imput all amounts as positive values. Indicate the effect of each varlance by selectingfor favorable, U for unfavorable, and "None" for no effect (l.e, zero varlance).) Variable overhead rate variance Variable overhead efficlency variance

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