Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared usin
Posted: Wed May 04, 2022 7:21 am
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:
During November, the following activity was recorded related to
the production of Fludex:
There was no beginning inventory of materials; however, at the
end of the month, 2,900 ounces of material remained in ending
inventory.
The company employs 21 lab technicians to work on the production
of Fludex. During November, they each worked an average of 140
hours at an average pay rate of $11.50 per hour.
Variable manufacturing overhead is assigned to Fludex on the
basis of direct labor-hours. Variable manufacturing overhead costs
during November totaled $4,400.
During November, the company produced 4,200 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 21 technicians employed in the production of
Fludex consisted of 3 senior 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 efficiency
variances.
-Req 1A
For direct materials, compute the price and quantity
variances. (Indicate the effect of each variance by selecting
"F" for favorable, "U" for unfavorable, and "None" for no effect
(i.e., zero variance). Input all amounts as positive values.)
-Req 1B
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?
YES or NO ??
-Req 2A
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
(i.e., zero variance). Input all amounts as positive values.)
-Req 2B
In the past, the 21 technicians employed in the production
of Fludex consisted of 3 senior 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?
YES or NO??
-Req 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
(i.e., zero variance). Input all amounts as positive values.)
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:
There was no beginning inventory of materials; however, at the
end of the month, 2,900 ounces of material remained in ending
inventory.
The company employs 21 lab technicians to work on the production
of Fludex. During November, they each worked an average of 140
hours at an average pay rate of $11.50 per hour.
Variable manufacturing overhead is assigned to Fludex on the
basis of direct labor-hours. Variable manufacturing overhead costs
during November totaled $4,400.
During November, the company produced 4,200 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 21 technicians employed in the production of
Fludex consisted of 3 senior 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 efficiency
variances.
-Req 1A
For direct materials, compute the price and quantity
variances. (Indicate the effect of each variance by selecting
"F" for favorable, "U" for unfavorable, and "None" for no effect
(i.e., zero variance). Input all amounts as positive values.)
-Req 1B
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?
YES or NO ??
-Req 2A
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
(i.e., zero variance). Input all amounts as positive values.)
-Req 2B
In the past, the 21 technicians employed in the production
of Fludex consisted of 3 senior 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?
YES or NO??
-Req 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
(i.e., zero variance). Input all amounts as positive values.)