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Becton Labs,Inc, produces various chemi elaborate distilling process The company has developed standard costs for one unit of Fludex, as follows cal compounds for industrial
Becton Labs,Inc, produces various chemi elaborate distilling process The company has developed standard costs for one unit of Fludex, as follows cal compounds for industrial use. One compound, called Flu dex, is prepared using an Dir Direct labor $22.00 per ounce s46.20 12.00 overhead 8.80 hours $2.50 per hour Total standard cost per unit During November, the following activity was recorded related to the production of Fludex a Materials purchased, 10,500 ounces at a cost of $216,825 b. There was no beginning inventory of materials however, at the end of the month, 2600 ounces of material remained in ending c. The company employs 20 lab technicians to work on the production of Fludex During November, they each worked an average of d Variable manufacturing overhead is assigned to Fludex on the basis of direct labor-hours Variable manu e. During November, the company produced 3.700 units of Fludex inventory 180 hours at an average pay rate of $14.00 per hout during November totaled $7000 facturing overhead costs 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 8 senior technicians and 12 assi stants During November, the company experimented with fewer senior technicians and more assistants in order to reduce labor costs Would recommend that the new labor mix be continued? 3 Compte the variable overhead rate and efficiency' variances
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