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Becton Labs, Inc, produces various chemical compounds for industrial use. One compound, called Fludex, is prepared using an elaborate disulling process. The company has developed standard costs for one unit of Fludex, as follows: During November, the following activity was recorded related to the production of Fludex a. Materlals purchased, 12,000 ounces at a cost of $282,000. b. There was no beginning inventory of materials; however, at the end of the month, 2750 ounces of material remained in ending inventory. c. The company employs 25 lab techniclans to work on the production of Fudex, During November, they each worked an average 0 110 hours at an average pay rate of $11.50 per hour. d. Variable manufacturing overhead is assigned to Fludex on the basis of direct labor-hours. Variable manufacturing overhead costs during November totaled $2400 e. During November, the company produced 4,100 units of Fudex. 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 enterinto a long-term purchase contract. Would you recommend that the company sign the contract? 2. For direct labor: a. Compute the rate and efficlency variances. b. In the past, the 25 techniclans employed in the production of Fludex consisted of 5 senior techniclans and 20 assistants. During November, the company experimented with fewer senion techniclans 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. Complete this question by entering your answers in the tabs below

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