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 Quantit Standard PriceStandard or Hours or Rate Direct materials Direct labor Variable manufacturing overhead Total standard cost per unit 2.20 ounces 0.80 hours 0.80 hours $16.00 per ounce$35.20 $12.00 per hour $ 2.50 per hour00 2.00 $46.80 During November the following activity was recorded related to the production of Fludex: Materials purchased, 11,000 ounces at a cost of $160,600. b. There was no beginning inventory of materials: however, at the end of the month, 3,100 ounces of material remained in ending inventory c. The company employs 23 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 abor-hours. Variable manufacturing overhead costs during November totaled $4,200. e. During November, the company produced 3,500 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