Becton Labs, Inc

Subject:BusinessPrice: Bought3

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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:

 Standard QuantityStandard Price

or RateStandard CostDirect materials 2.40 ounces $18.00per ounce $43.20Direct labor 0.70 hours $14.00per hour 9.80 Variable manufacturing overhead 0.70 hours $3.00per hour 2.10     $55.10 

During November, the following activity was recorded relative to production of Fludex:

a. Materials purchased, 12,000 ounces at a cost of $198,000.

b. There was no beginning inventory of materials; however, at the end of the month, 3,200 ounces of material remained in ending inventory.

c. The company employs 20 lab technicians to work on the production of Fludex. During November, they worked an average of 160 hours at an average rate of $12.00 per hour.

d. Variable manufacturing overhead is assigned to Fludex on the basis of direct labor-hours. Variable manufacturing overhead costs during November totaled $4,800.

e. During November, 3,600 good units of Fludex were produced.

Need:

Materials price and quantity variance

Labor efficiency and rate variance

Variable overhead rate and efficiency variance