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Eecton Labh, thioperated, produces various chemicat compounds for industriaf use, One compound, called fudes, it prepared ualing an elaborate disting process. The comphny lat developed
Eecton Labh, thioperated, produces various chemicat compounds for industriaf use, One compound, called fudes, it prepared ualing an elaborate disting process. The comphny lat developed standond costs for ane unh of fluden, is follows: Ouring Novembee the folkwing activiy was recorded related to the production of Fludex 4. Matenak quichmsed, 13,500 ounces a a cost of 5266625 b. There was no begining inventory of inaterigla; hewever, at the end of the mortir, 4,200 cunces of material remained in ending incentory c. The company employs 24 lab tecteicians to wok on the production of Pudex. During Novembec they each wocked an awerage of 180 hours at an deverage piy rale of 514so per hour duting Nowember boteled 56.800 6. Bundig Novenbec the compsny produced 3.800 unts of Fudee. Required: I Far direct matenars a. Compote the pise and quartity variances. b. The mimeriak wire purchased from a newy supplier who is anepus io enter into s iong tem porchase contrict. Woud you teconimeod thin the compsny wign the contract? 2. For direct labor: a. Compute the rate and efliciency variances: b. In the past, the 24 technicians employed in the production of Fludex consisted of 4 senior technicians and 20 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 efficlency variances
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