Can someone help me with the Labor efficiency varriance for 2A?
Problem 10-14 Basic Variance Analysis (L010-1, LO10-2, LO10-3) Becton Labs, Inc., produces various 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: Standard Quantity Standard Price Standard or Hours or Rate 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 following 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, 2,500 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 an 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. 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 35 technicians employed in the production of Fludex consisted of 20 senior technicians and 15 assistants. During November, the company experimented with fewer senior technicians and more assistants in order to reduce labor costs. Would you recommend that the new labor mix be continued? 3. Compute the variable overhead rate and efficiency variances. 5 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, 2,500 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 an 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 4 Dos 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 3. Compute the rate and efficiency variances. b. In the past, the 35 technicians employed in the production of Fludex consisted of 20 senior technicians and 15 assistants. During November, the company experimented with fewer senior technicians and more assistants in order to reduce labor costs. Would you recommend that the new labor mix be continued 2. Compute the variable overhead rate and efficiency variances Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Regia Recto R2A Reg 28 Regu For direct labor, compute the rate and efficiency variances. (Indicate the effect of each variance by selecting "Por favorable "U" for unfavorable, d 'None" for emet e zero variance) Inout all amounts as positive values.) 2800 Laboratory variance U
