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, 2,500 ounces of material remained in ending inventory.

The company employs 35 lab technicians to work on the production of Fludex. During November, they worked an average of 160 hours at an average rate of $12 per hour.

Variable manufacturing overhead is assigned to Fludex on the basis of direct labor-hours. Variable manufacturing overhead costs during November totaled $18,200.

Standard Quantity Standard Price
or Rate Standard Cost   Direct materials    2.5 ounces $ 20.00 per ounce $ 50.00   Direct labor    1.4 hours $ 12.50 per hour 17.50     Variable manufacturing overhead    1.4 hours $ 3.50 per hour 4.90       $ 72.40    

Explanation / Answer

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

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