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Problem 10-14 Basic Variance Analysis [LO10-1, LO10-2, LO10-3] Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared using
Problem 10-14 Basic Variance Analysis [LO10-1, 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 Price Standard Standard Quantity or Rate Cost 2.60 ounces 0.60 hours 0.60 hours $52.00 9.60 2.70 20.00 per ounce Direct materials Direct labor Variable manufacturing overhead $16.00 per hour $ 4.50 per hour $64.30 During November, the following activity was recorded relative to production of Fludex: a. Materials purchased, 13,000 ounces at a cost of $244,400. b. There was no beginning inventory of materials; however, at the end of the month, 3,300 ounces of c. The company employs 20 lab technicians to work on the production of Fludex. During November, they d. Variable manufacturing overhead is assigned to Fludex on the basis of direct labor-hours. Variable e. During November, 3,600 good units of Fludex were produced material remained in ending inventory worked an average of 150 hours at an average rate of $14.00 per hour. manufacturing overhead costs during November totaled $6,500
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