Becton Labs, incorporated, produces various chemicai compounds for industrial use. One compound, called Fludex, is prepared using an elaborate distiling process. The company has developed standard costs for one unit of Fudex, as follows: During November, the following activity was recorded related to the production of Fludex: a. Materials purchased, 14,000 ounces at a cost of $289,800. b. There was no beginning inventory of matorlals; however, at the end of the month, 4,050 ounces of matertal femained in ending inventory c. The company employs 26 lab technicians to work on the production of Fludox, During November, they each wocked an average of 150 howit atan averege pay rato of $1500 per houk. d. Varisble manufacturing overthead is assigned to Fludex on the basis of direct labar-houn. Vafiable manufacturing overfiead costs during November totaled $5.000. e. Ouring Novermet, the company produced 3,900 units of Fludex. Pequired: 1 For diecthaterials a. Compaite the price and quantity variances. b. The moterials were purchased from a new supplier who is ansoun to enter into a long-term purchase contract Would you recommend that the company sign the controct? 2. For direct inbor: i. Compule the rate and afficiency variances Wi in than nest the 26 : Required: 1. For direct materials: a. Compute the price and quantity variances. b. The materials were purchased from a new supplier who is andious 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 26 technicians employed in the production of Fludex consisted of 6 senior technicians and 20 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. Complete this question by entering your answers in the tabs below. For direct materials, compute the price and quantity variances. (Indicate the effect of each variance by seiecting F1 for