Becton Labs, Incorporated, produces varlous 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 was recorded related to the production of Fludex:

a$.$ Materlals purchased, $12,500$ ounces at a cost of $$282,500.$

b$.$ There was no beginning inventory of materlals; however, at the end of the month, $3,000$ ounces of materlal remalned in ending

Inventory.

c$.$ The company employs $26$ lab techniclans to work on the production of Fludex. During November, they each worked an average of

$150$ hours at an average pay rate of $$14\mathrm{.}00$ per hour.

d$.$ Varlable manufacturing overhead is assigned to Fludex on the basis of direct labor$-$hours. Varlable manufacturing overhead costs

during November totaled $$8,000.$

e$.$ During November, the company produced $4,100$ units of Fludex.

Required:

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

recommend that the company sign the contract?

$2$ For direct labor:

a$.$ Compute the rate and efficlency varlances.

b$.$ In the past, the $26$ technicians employed in the production of Fludex consisted of $4$ senior techniclans and $22$ 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?

Compute the varlable overhead rate and efficiency varlances.

Answer is complete but not entirely correct.

Complete this question by entering your 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 $($i$.$e$.,$ zero variance$).$ Input all amounts as positive values.$)$