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 cosis for one unit of Fludex, as follows. During November, the following activity was recorded related to the production of Fludex a. Matertals purchased, 11,000 ounces at a cost of $237,600 b. There was no beginning inventory of materials, however, at the end of the month, 2,650 ounces of material remained in ending inventory. c. The company employs 18 lab technicians to work on the production of Fludex. During November, they each worked an average of 190 hours at an average pay rate of $10.50 per hour d. Variable manufacturing overhead is assigned to Fudex on the basis of direct labor-hours Variable manufacturing overthead costs during November totaled \$6,200: e. During November, the company produced 3.750 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 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 vaciances b. In the past. the 18 technicians employed in the production of Fiudex consisted of 5 senfor technicians and 13 assistants, During November, the company experimented with fewer senior technicions and more assistants in order to reduce inbor costs Woud you recommend that the new labor foix be continued? 3. Compute the variable overhead rate and efficiency vortances 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 18 technicians employed in the production of Fludex consisted of 5 senior technicians and 13 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. Note: Indicate the effect of each variance by selecting "F" for favorable, " U " for unfavorable, and "Nene" for no offect (l,e, zero varance). Input all amounts as positive valuee. 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 directlabor: a Compute the rate and efficiency variances b. In the past, the 18 technicians employed in the production of Fludex consisted of 5 senior technicians and 13 assistants. Dur November, the company experimented with fewer senior technicians and more assistants in order to reduce labor costs. Wo 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, 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? 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 18 technicians employed in the production of Fludex consisted of 5 senior technicians and 13 assistants. During November, the company experimented with fewer senior technicians and more assistants in order to reduce labor casts. Woul 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 labor, compute the rate and efficiency variances. Notn: Indicate the effect of each variance by selecting "F" for fovorable, " U " for unfavorable, and "None" for no effect (l,e, Tero variance), Input all amounts as positive values. 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 18 technicians employed in the production of Fludex consisted of 5 senior technicians and 13 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. In the past, the 18 technicians employed in the production of Fludex consisted of 5 senior technicians and 13 assistants. During November, the company experimented with fewer senior teciniclans and more assistants in order to reduce labor costs. Would you recommend that the new labor mix be continued? Would you i cocornmend that the new labor mix be contrued? 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 18 iechnicians employed in the production of Fludex consisted of 5 senior technicians and 13 assistants, During Novimber, 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 vatiances. Complete this question by entering your answers in the tabs below. Compute the variable overhead rate and efficiency variances. Note: Indicate the eifect of each variance by selecting "F" for faworable, " 4 " for unfavorable, and "None" for no effect (i.e. fero variance), Input all amounts as positive valuos
