22 12 points Problem 10-14 (Algo) Basic Variance Analysis [LO10-1, LO10-2, LO10-3] Becton Labs, Incorporated, 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. 012649 Direct materials Direct labor Variable manufacturing overhead Total standard cost per unit Standard Quantity or Standard Hours 2.10 ounces 9.80 hours 0.80 hours Standard Price on Rate $22.00 per ounce $ 15.00 per hour $2.50 per hour Cost $ 46.20 12.00 2.00 $60.20 During November, the following activity was recorded related to the production of Fludex a Materials purchased, 10,500 ounces at a cost of $216,825. b. There was no beginning inventory of materials; however, at the end of the month, 2,600 ounces of material remained in ending Inventory c. The company employs 20 lab technicians to work on the production of Fludex During November, they each worked an average of 180 hours at an average pay rate of $14.00 per hour d. Variable manufacturing overhead is assigned to Fludex on the basis of direct labor-hours Variable manufacturing overhead costs during November totaled $7,000. e During November, the company produced 3,700 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 20 technicians employed in the production of Fludex consisted of 8 senior technicians and 12 assistants. During 180 hours at an average pay rate of $14.00 per hour. d. Variable manufacturing overhead is assigned to Fludex on the basis of direct labor-hours. Variable manufacturing overhead costs during November totaled $7,000. e. During November, the company produced 3,700 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 20 technicians employed in the production of Fludex consisted of 8 senior technicians and 12 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 Req 18 Req2A Red 28 Rea For direct materials, compute the price and quantity variances. Note: 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. Materials price variance Materials quantity variance Req 18 > 180 hours at an average pay rate of $14.00 per hour. d. Variable manufacturing overhead is assigned to Fludex on the basis of direct labor-hours. Variable manufacturing over during November totaled $7,000. e. During November, the company produced 3,700 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. Woul recommend that the company sign the contract? 2. For direct labor a. Compute the rate and efficiency variances. b. In the past, the 20 technicians employed in the production of Fludex consisted of 8 senior technicians and 12 assistan November, the company experimented with fewer senior technicians and more assistants in order to reduce labor co 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 Req 18 Req 2A Req 28 Req 3 For direct materials, 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? Would you recommend that the company sign the contract? 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. Wo recommend that the company sign the contract? 2. For direct labor a. Compute the rate and efficiency variances. b. In the past, the 20 technicians employed in the production of Fludex consisted of 8 senior technicians and 12 assis November, the company experimented with fewer senior technicians and more assistants in order to reduce labor 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 Req 18 Req 2A Req 2B Req 3 For direct labor, compute the rate and efficiency variances. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (.e. zero variance). Input all amounts as positive values. Labor rate variance Labor efficiency variance 57 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 20 technicians employed in the production of Fludex consisted of 8 senior technicians and 12 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 Req 18 Req 2A Req 28 Req 3 In the past, the 20 technicians employed in the production of Fludex consisted of 8 senior technicians and 12 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? Would you recommend that the new labor mix be continued? 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 20 technicians employed in the production of Fludex consisted of 8 senior technicians and 12 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 Req 18 Req 2A Req 28 Req 3 Compute the variable overhead rate and efficiency variances. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (.e. zero variance). Input all amounts as positive values. Variable overhead rate variance Variable overhead efficiency variance