Becton Labs, Inc., produces various chemical compounds for industrial use. One c

Question

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:

   

There was no beginning inventory of materials; however, at the end of the month, 4,200 ounces of material remained in ending inventory.

The company employs 24 lab technicians to work on the production of Fludex. During November, they worked an average of 140 hours at an average rate of $14.50 per hour.

Variable manufacturing overhead is assigned to Fludex on the basis of direct labor-hours. Variable manufacturing overhead costs during November totaled $6,800.

For direct materials:

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:

lechnicians employed in the production of Fludex consisted of 4 senice November, the company experimented with fewer serio echeicians and more assistants in order to save costs Would you recommend that the new labor and variances (Round your "rate per hour" answers VMiance by selecting "F" for favorable, W" for zero

Explanation / Answer

Material Price Varriance= (SP-AP)AQ

= (21-19.75)*9300 = $11625 favourable

Material Quantity Varriance = SP*(SQ-AQ)

= $21(9120-9300) =-$3780 U

Actual Labour Hrs.= 140*24 =3360 Hrs.

Labour Rate Varriance= (SR*AH)- (AR*AH)

= (15*3360) - (14.50*3360) = $1680 F

Labour Efficiency Varriance = (SR*SH)- (SR*AH)

= (15*3040) - (15*3360) =-$4800 U

Varriable Overhead Rate Varriance= (SR*AH)- (AR*AH)

= (3.50*3360) - $6800 = $4960 F

Varriable Overhead Efficiency Varriance = (SR*SH)- (SR*AH)

= (3.50*3040) - (3.50*3360) =-$1120 U

Materia; Purchased Cost $266,625.00 Material Purchased 13500 Ending Inventory 4200 Material Consumed 9300 Cost per Ounce $19.75 Units Produced 3800 Consumption per unit 2.45

Related Questions

Navigate

• Browse (All)
• Browse B
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.