Required:

2. For direct labor:

a. Compute the rate and efficiency variances.

3. Compute the variable overhead rate and efficiency variances.

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: 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