Bocton Labs incorporafed, proctuces valous chemical compounds for industuial use. One compound, called Fludex, is prepared using an elaborate distilling process. The comparly has developed standard casts for one unit of fludex as follows: During November, the foliowing activity was recorded related to the production of Fludex: 3. Materials purchased, 10,500 ounces at a cost of $216.825 b. There was no beginining inventory of materlals howevec, at the end of the month 2.600 ounces of material remained in ending inveritory. c. The company employs 20 lab technicians to work on the production of Fludex. Duting November, they each worked an awarage of 180 hours at an avetage pay rate of $14.00 per hou. during November lotaled $7,000 e. Duing November, the company produced 3700 units of Fludex Required: 1. Fon direct materials a. Compute the price and quantity variances. b. The mateslals wete purchased from a new supplier who is anxious to enter into a fong tem purchase contedct. Would you: iscommend that the compary sipn the contract? 2. For diect laboin: a. Compute the rate and elficiency variances. 5 In the past the 20 techricians empioyed in the production of Fludex consested of 8 senior fechnichins and 12 assistants, Duniag Required: 1. For direct materials: A. Compute the price and quantity varances. b. The materials were purchased from a new supplier who is anxious to enter into a lang-term purchase contract. Would you fecommend 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 assistants. During November, the company experimented with fewer senior techniclans and more assistants in ordes to reduce labor casts. Would you recommend that the new labor mix be continued? 3. Compule the variable overhead rate and efficiency variances. Bocton Labs incorporafed, proctuces valous chemical compounds for industuial use. One compound, called Fludex, is prepared using an elaborate distilling process. The comparly has developed standard casts for one unit of fludex as follows: During November, the foliowing activity was recorded related to the production of Fludex: 3. Materials purchased, 10,500 ounces at a cost of $216.825 b. There was no beginining inventory of materlals howevec, at the end of the month 2.600 ounces of material remained in ending inveritory. c. The company employs 20 lab technicians to work on the production of Fludex. Duting November, they each worked an awarage of 180 hours at an avetage pay rate of $14.00 per hou. during November lotaled $7,000 e. Duing November, the company produced 3700 units of Fludex Required: 1. Fon direct materials a. Compute the price and quantity variances. b. The mateslals wete purchased from a new supplier who is anxious to enter into a fong tem purchase contedct. Would you: iscommend that the compary sipn the contract? 2. For diect laboin: a. Compute the rate and elficiency variances. 5 In the past the 20 techricians empioyed in the production of Fludex consested of 8 senior fechnichins and 12 assistants, Duniag Required: 1. For direct materials: A. Compute the price and quantity varances. b. The materials were purchased from a new supplier who is anxious to enter into a lang-term purchase contract. Would you fecommend 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 assistants. During November, the company experimented with fewer senior techniclans and more assistants in ordes to reduce labor casts. Would you recommend that the new labor mix be continued? 3. Compule the variable overhead rate and efficiency variances
