Problem 10-14 (Algo) Basic Varlance Analysis (LO10-1, L010-2, L010-3] Becton Labs, Inc., produces various chemical compounds for Industrial use. One compound, called udex, is prepared using an elaborate distilling process. The company has developed standard costs for one unit of Fludex, as follows. Standard Quantity Standard Price Standard or Hours on Rate Cost Direct materiais 2.00 Gaices $21.00 per ounce $ 42.40 Direct Labor 2.0 hours $12.00 per hour 10.80 Variable manufacturing overhead 0.90 hours $ 2.00 per hour 1.80 Total standard cost per unit $54.60 ok rences Durtng November, the following activity was recorded related to the production of Fiudex a. Materials purchased 10,000 ounces at a cost of $197000, b. There was no beginning inventory of materials, however, at the end of the month, 2,550 ounces of material remained in ending Inventory c. The company employs 24 lob technicians to work on the production of Rudex. During November, they each worked an average of 170 hours at an average pay rate of $1150 per hour d. Vrtable manufacturing overhead is assigned to Fudox on the basis of direct labor. hours. Vortable manufacturing overhead costs .. Duning November, the company produced 3700 units of Rudox Required: For direct material: a. Compute the price and quantity vartances b. The materials were purchased from a new supplier who is an out to enter into a long-term purchase contract. Would you recommend that the company in the contract? 2 For drocilabor a Compute the rate and Miciency variances In the past, the 24 technicians employed in the production of Fludercons sted of 6 senior technicians and 18 assistants. During November the company experimented with fowe senior technicians and more assistit in order to reduce labor costs. Would you recommend that the new labor mix be continued? 3. Comote the variable overheed rate and efficiency variances 0 eBook Required: For direct materials: a Compute the price and quantity variances b. The materials were purchased from a new supplier who is ardous 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 24 technicians employed in the production of Fiudex consisted of 6 confor technicians and 18 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 officiency variances References Complete this question by entering your answers in the tabs below. Reg 1A ng 10 Reg 21 Reg 20 Rega For direct materials, compute the price and quantity vanances. Indicate the effect of each variance by selecting for favorable. U for unfavorable and 'None for no effect zero variance). Input all amounts as positive values Minerals once and Materials guante variante Reg 1B