Becton Labs, Incorporated, produces various chemical compounds for industrial use. One compound, callod Fludex, is prepored using an elaborate distaling 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: a. Materials purchased, 13,000 ounces at a cost of $330,200. b. There was no beginning inventory of materials; however, at the end of the month, 2,850 ounces of material remained in ending imventory. c. The company employs 20 lab technicians to work on the production of Fludex. During November, they each worked an averege of 160 hours at an average pay rate of 511.00 per hour. d. Variable manufacturing overhead is assigned to Fludex on the basis of direct labor-hours. Variable manufacturing overhead costs during November totaled \$6,000. e. During November, the company produced 4,200 units of Fludex. Required: 1. For direct materlals: a. Compute the price and quantity varlances. b. The materlals were purchased from a new supplier who is anxious to enter into a long-term purchase contract. Would you tecommend that the company sign the contract? 2. For direct labor: a. Compute the rate and efliciency variances. b. In the past, the 20 technicians employed in the production of Fludex consisted of 7 senior technicians and 13 assistants. During November, the company experimented with fewer senior techniclans 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 effiency varlances. 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 varienica by selecting "F* for favorable, "U" for unfovarable, and "None" for na effect (i.e., zero veriance). Input all amounts as poeltive values.) Becton Labs, Incorporated, 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 Fudex, as follows: During November, the following activity was recorded related to the production of Fludex a. Materials purchased, 13,000 ounces at a cost of $330,200. b. There was no beginning inventory of materials; however, at the end of the month, 2.850 ounces of material remained in ending inventory. c. The compary employs 20 lab technicians to work on the production of Fludex, During November, they each worked an average of 160 hours at an average pay rate of $11.00 per hour. d. Variable manufacturing overhead is assigned to Fludex on the basis of direct labor-hours. Variable manufacturing overhead costs during November totaled $6,000. e. During November, the company produced 4,200 units of Fludex. Requlred: 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: a. Compute the rate and efficiency variances. b. In the past, the 20 technicians employed in the production of Fludex consisted of 7 senior technicians and 13 assistants. During November, the company experimented with fewer senior techniclans 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 laber, compute the rate and effiency variances. (tndicate the effect of each variance by selecting "F" for favorabie, "U" for unfavorable, and "None' for no effect (Le., tero varianch). Input all amounts as powitive values.) Becton Labs, Incorporated, 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 Fudex, as follows: During November, the following activity was recorded reloted to the production of Fludex: a. Materiais purchased, 13,000 ounces at a cost of $330,200. b. There was no beginning inventory of moterials; however, at the end of the month, 2,850 ounces of material remained in ending inventory. c. The company employs 20 lab technicians to work on the production of Fludex. During November, they each worked an average of 160 hours at an average pay rate of $11.00 per hour. d. Variable manufacturing overhead is assigned to Fludex on the basis of direct labor-hours. Variable manufacturing overhead costs during November totaled $6,000. e. During November, the company produced 4.200 units of Fludex. Required: 1. For direct materials: a. Compute the price and quantity varlances. b. The materials were purchased from a new suppler who is anxious 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 20 techiniclans employed in the production of Fludex consisted of 7 senior techniclans and 13 assistants. During November, the company experimented with fewer senior techniclans and more assistants in order to reduce tabor costs. Would you fecommend 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. Compute the variable overhead rate and efficiency varlances. (Incicate the effect of each variance by selecting F for favorable, "U" for unfavorable, and "None" for no effect (i.e, zero variance), tinput all amounts as positive values.)
