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

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

There was no beginning inventory of materials; however, at the end of the month, $2,500$ ounces of material remained in ending

inventory.

The employs $35$ lab technicians to work on production of Fludex. During November, they each worked an average of $160$

hours at an average pay rate of $$22$ per hour.

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

costs during November totaled $$18,200.$

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

Required Deliverables:

Compute the price and quantity variances. 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?

Compute the labor rate and efficiency variances.

Compute variable overhead rate and efficiency variances.