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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 or Hours 2.20 ounces Standard Price Standard or Rate Cost $23.oe per $50.60 ounce $14.ee per 8.40 Direct materials Direct labor Variable manufacturing overhead Total standard cost per unit 0.60 hours 8.60 hours hour per $ 2.50 hour 1.50 $60.50 During November, the following activity was recorded related to the production of Fludex a. Materials purchased, 12,000 ounces at a cost of $259,800 b. There was no beginning inventory of materials; however, at the end of the month, 3,100 ounces of material remained in ending inventory The company employs 25 lab technicians to work on the production of Fiudex. During November, they each worked an average of 130 hours at an average pay rate of $12.00 per hour. d. Variable manufacturing overhead is assigned to Fludex on the basis of direct labor-hours. Variable manufacturing overhead costs during November totaled $4,200. e During November, the company produced 4,000 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 25 technicians employed in the production of Fludex consisted of 4 senior technicians and 21 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. Complete this question by entering your answers in the tabs below. Req 1A Reg 1B Req ZA Req 2B Reg 3 For direct labor, compute the rate and efficiency variances. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (1.e. zero variance). Input all amounts as positive values.) Show less 6,501U x Labor rate variance Labor efficiency variance 10,200% U > 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 Standard Price Standard Quantity or Hours or Rate Cost Direct materials 2.28 ounces $23.00 per $50.60 ounce Direct labor 0.60 hours 8.40 hour Variable manufacturing .60 hours overhead $ 2.50 per 1.58 hour Total standard cost per unit $60.58 $14.ee per During November, the following activity was recorded related to the production of Fludex a. Materials purchased, 12,000 ounces at a cost of $259,800 b. There was no beginning inventory of materials; however, at the end of the month, 3,100 ounces of material remained c The company employs 25 lab technicians to work on the production of Fludex. During November, they each worked an average of 130 hours at an average pay rate of $12.00 per hour. d Variable manufacturing overhead is assigned to Fludex on the basis of direct labor-hours. Variable manufacturing overhead costs during November totaled $4,200. e. During November, the company produced 4,000 units of Fludex Required: 1. For direct materials: a. Compute the price and quantity variances. b. The materials were purchased from a new suppler who is anxious to enter into a long-term purchase contract Would you recommend that the company sign the contract? 2. For direct labor e. Compute the rate and efficiency variances b. In the past, the 25 technicians employed in the production of Rudex consisted of 4 senior technicians and 21 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 Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Req 2A Reg 28 Reg 3 Compute the variable overhead rate and efficiency variances. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (ie.. zero variance). Input all amounts as positive values.) Show less 3,933XF Variable overhead rate variance Variable overhead efficiency variance 2.125 F

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