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: During November, the following activity wos recorded reloted to the production of Fludex: a. Moterials purchased, 10,500 ounces at a cost of $143,325. b. There wos no beginning inventory of materials; however, ot the end of the month, 3,050 ounces of material remained in ending inventory c. The compony employs 21lab technicians to work on the production of Fludex. During November, they each worked an average of 160 hours at on averoge pay rate of $13.50 per hour. d. Vorioble manufacturing overnead is ossigned to Fludex on the besis of direct lobor-hours. Variable manufacturing overhead costs duning November totoled $6,800 e. During November, the compony produced 3,500 units of Fludex. Required: 1. Fordirect 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 compony sign the contract? 2. For direct labor: a. Compute the rate and efficiency variances. b. In the past, the 21 technicians employed in the production of Fludex consisted of 5 senior techricians 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. 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 selecting " F " for favorable, " U " for unfavorable, and "None for no effect (i.e, zero variance). Input all amounts as positive values.) Required: 1. For direct materials: - Compute the price and quanty 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 post, the 21 technicians employed in the production of Fludex consisted of 5 senior technicians and 16 assistants. During November, the company experimented with fewer senior technicions 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 vour answers in the tabs below. For direct labor, compute the rate and efficiency variances, (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (1.e, zero variance), Input all amounts as positive values.) Required: 1. For direct materials: a. Compute the price and quantity variances. b. The matenals were purchased from a new supplier who is anxious to enter into o 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 21 technicians employed in the production of Fludex consisted of 5 senior technicians and 16 assistants. During Novembet, the compony 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 voriable overheod rate and efficlency variances. Complete this question by entering vour answers in the tabs below. Compute the variable overhead rate and efficiency variances. (Indicate the effect of each variance by selecting "F" for favorable, U for unfavorable, and "None" for no effect (.e., zero variance), Input all amounts as positive values.)
