Becton Labs, Incorporated, produces various chemical 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 Fludex, as follows: During November, the following activity was recorded related to the production of Fludex: a. Materlals 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 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. Varlable manufacturing overhead is assigned to Fludex on the basis of direct labor-hours. Variable manufacturilgg oveithead costs during November totaled $6,000 e. During November, the company produced 4.200 units of Fludex. 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 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. Varlable manulacturing overhead is assigned to Fludex on the basis of direct labor-hours. Variable manufacturing overhead costs during November totaled $6,000. e. Buring November, the company produced 4.200 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 tectiniciens employed in the production of Fludex consisted of / sentor techincians and 13 assistarib. Duiting November, the company experimented with fewer sentor technicians and more assistants in order to reduce labor costs Would you recommend that the new labor mix be continued? 3. Compute the variable oveineud rate and efficiency variances. Compute the variable overhead rate and efficiency variances. Complete this question by entering your answers in the tabs below. For diregt materials, compute the price and quantity variances. (Indicate the effect of each varlance by selecting "F" for tavorable, "U" for unfavorable, and "None" for no effect (1.e., zero variance). Input all amounts as positive values.) D. In the past, the 20 technicians employed in the production of Fludex consisted of 7 senior technicians and 13 assistants. Dur November, the company experimented with fewer senlor technicians and more assistants in order to reduce labor costs. Whuli recommend that the new labor mix be continued? 3. Compute the variable overhead rate and efficiency varlances. 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 purchise contract. Would you recommend that the company sign the contract? 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. (Indicate the effect of each "U" for unfavorable, and "None" for no effect (1.e., zero variance). Input all amounts as
