Becton Labs, Inc., produces varlous chemical compounds for Industrial use. One compound, called Fludex, Is prepared using an elaborate distlling process. The company has developed standard costs for one unlt of Fludex, as follows: Standard Quantity or Hours Direct materials Direct labor Variable manufacturing overhead Total standard cost per unit 2.30 ounces 9.68 hours 9.68 hours Standard Price or Rate 17.68 per ounce $13.88 per hour $ 2.58 per hour Standard Cost $39.1 7.80 1.50 $48.48 During November, the following activity was recorded related to the production of Fludex: a. Materlals purchased, 11,500 ounces at a cost of $178,825 b. There was no beginning Inventory of materlals; however, at the end of the month, 3.150 ounces of materlal remalned In ending Inventory C. The company employs 17 lab techniclans to work on the production of Fludex. During November, they each worked an average of 160 hours at an average pay rate of $11.50 per hour. d. Varlable manufacturing overhead is assigned to Fludex on the basis of direct labor-hours. Varlable manufacturing overhead costs during November totaled $3,000. e. During November, the company produced 3,500 units of Fludex Required: 1. For direct materlals: a. Compute the price and quantity varlances. b. The materlals were purchased from a new suppller who Is anxlous to enter Into a long-term purchase contract. Would you recommend that the company slgn the contract? 2. For direct labor a. Compute the rate and efficlency varlances. b. In the past, the 17 techniclans employed In the production of Fludex consisted of 4 senlor technlclans and 13 assistants. During November, the company experimented with fewer senlor techniclans and more assistants In order to reduce labor costs. Would you recommend that the new labor mix be continued? 3. Compute the varlable overhead rate and efficlency varlances