BectonLabs;Inc produces various chemical compounds for industrial use.One compound called Fludex is prepared using an elaborate distilling process.The company has developed standard csts for one unit of Fludex as follows

	Standard Quantity or hours	Standard Price or Rate	Standard cost
Direct Materials	2.5 ounces	$20.00 per ounce	$50.00
Direct Labor	1.4 hours	$22.50 per hour	31.50
Variable manufacturing overhead	1.4 hours	$3.50 per hour	4.90
Total standard cost per unit			$86.40

During November the fllowing activity was recorded related to the production of Fludex:

a.Materials purchased 12,000 ounces at a cost of $225,000

b.There was no beginning inventory of materials :however at the end of the month ,2500 ounces of material remained in ending inventory.

c.The company employs 35 lab technicians to work on the production of fludex.During November they each worked an average of 160 hours at ana average pay rate of $22 per hour.

d.Variable manufacturing overhead is assigned to fludex on the basis of direct labor -hours;variable manufacturing overhead costs during November Totaled $18,200.

e.During November,the company produced 3,750 units of Fludex.

1.Direct materials

a.compute the price and quantity variance

b. If 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?Explain

2.Direct Labor

a.compute the rate and efficiency variances.

B.in the past the 35 technicians employed in the production of Fludex considered of 20 senior technicians and 15 assistants.During November the company experimented with fewer senior technicians and more assistants in order to reduce labor cost..Would you recommend thet the new labor mix be continued..explain