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 Fludex, as follows:

Standard Quantity or HoursStandard Price or RateStandard Cost

Direct materials2.00ounces$ 30.00per ounce$ 60.00

Direct labor0.50hours$ 14.00per hour7.00

Variable manufacturing overhead0.50hours$ 3.40per hour1.70

Total standard cost per unit$ 68.70

During November, the following activity was recorded related to the production of Fludex:

Materials purchased, 10,000 ounces at a cost of $287,000.

There was no beginning inventory of materials; however, at the end of the month, 3,000 ounces of material remained in ending inventory.

The company employs 20 lab technicians to work on the production of Fludex. During November, they each worked an average of 130 hours at an average pay rate of $12.00 per hour.

Variable manufacturing overhead is assigned to Fludex on the basis of direct labor-hours. Variable manufacturing overhead costs during November totaled $4,700.

During November, the company produced 3,400 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:

a. Compute the rate and efficiency variances.

b. In the past, the 20 technicians employed in the production of Fludex consisted of 4 senior technicians and 16 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.

Becton Labs, incorporated produces various chemical compounds for industrial use. One compound, called Pudex, preporedung on elaborate distilling process. The company has developed standard couts for one unit of Fiudex, as follows Standard untity or Standard Hours Standard Price or date Cost Direct materials 2.00 ounces 510.00 per once 10.00 Director 8.50 hours $14.00 per hour 7.00 Variable manufacturing overhead 5 3.40 per hour 1.70 Total standard cost per unit During November, the following activity was recorded related to the production of Fludex 3. Materials purchased, 10,000 ounces ato com of $287.000 b. There was no beginning inventory of materials, however at the end of the month 3.000 ounces of material temained in ending inventory The company employs 20 lab technicians to work on the production of Puder During November, they each worked on average of 130 hours at an average pay rate of $12.00 per hour d. Vonable manufacturing overhead is assigned to Fludex on the basis of direct labor hours Variable manufacturing overhead costs during November totaled $4700 e. During November, the company produced 3.400 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 nous to enter into a long terms purchase coat would you recommend that the company sign the contract 2. For direct labor Compute the rate and efficiency wariances b. In the past, the 20 technicians employed in the production of Flux cond of 4 senior tech 15 bung November, the company experimented with fewer senior technicians and more on order to reduce or como recommend that the new labor mix be continued the variable overhead rate and ethiciency variances labor mix be continued our you 3. Compute the variable overhead rate and efficiency variances Complete this question by entering your answers in the tabs below. Reg 1A Reg 18 Reg 2A Reg 28 Reg 3 For direct materials, compute the price and quantity variances. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e, zero variance). Input all amounts as positive values.) Materials price variance Materials quantity variance Reg 18 ) ROSA Did the new labor mix be continued? we leduce labor costs. Would you 3. Compute the variable overhead rate and efficiency variances Complete this question by entering your answers in the tabs below. Req 1A Reg 1B Reg 2 Reg 28 Reg 3 a For direct materials, 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? Yes No lb assistants. During 10.15 hd more assistants in order to reduce labor costs. Would you Mix be continued? 3. Compute the variable overhead rate and efficiency variances Complete this question by entering your answers in the tabs below. Req 1A Reg 1B Reg 2A Reg 28 Reg 3 For direct labor, compute the rate and efficiency variances. (Indicate the effect of each variance by selecting " for favorable, "U" for unfavorable, and "None" for no effect (.e., zero variance). Input all amounts as positive values.) Labor rate variance Labor efficiency variance oor mix be continued? and 16 assistants. During ahs and more assistants in order to reduce labor costs. Would you 3. Compute the variable overhead rate and efficiency variances. Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Reg 2A Reg 28 Reg 3 In the past, the 20 technicians employed in the production of Fludex consisted of 4 senior technicians and 16 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? Yes NO Reg 2A Req3 > Ul Pudex consisted of 4 senior technicians and 16 assistants. During Hy 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. Reg 1A Reg 18 Req 2A Reg 28 Reg 3 Compute the variable overhead rate and efficiency variances. (Iridicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None' for no effect (1.. zero variance). Input all amounts as positive values.) Variable overhead rate variance Variable overhead efficiency variance