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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 followng activity was recorded related to the proctuction of Fludex a. Materiols purchased 10,500 ounces at a cost of 5143,325 b. There was no beginning inventory of materials. however, ot the end of the month, 3040 cunces of moterial remained in ending inventory c. The company employs 21 lab technicians to work on the production ct fludex. Duing Novernber, they each worked an averaoe of 160 hours at an average pay rate of $13.50 per houn a. Vanabie manufictuing ovethedd is assigned to Fludex on the baus of direct laborthours Variable manufacturing ovechead costs during Norember totaled $6800 e. Ouring November, the compary produced 3,500 unis of fludek: Required: 1. For direct materials: 0. Compuse the phce and quantiy yariances b. The masemals were purchased tiom a new supphier who is anowous to enter into a long-team nurchate contract Would you recommend that the compiny sign the contrac? 2. For direct labor: a. Compute the rate and efficiency vaciances b. In the past, the 21 technicans employed in the production of flubex combited of 5 senior technicians and 16 assionts. During November, the company experimented wat fewer semor technicians and mare assibtants in order to reduce labor costs. Would you tecommend that the new labor mix be contried? 3. Compute the vartabie oveihead rate and eficiency vanances

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