The Becton Enterprises (BE) produces a gasoline additive, Charger Power. This product increases engine efficiency and improves gasoline mileage by creating a more complete burn in the combustion process. Careful controls are required during the production process to ensure that the proper mix of input chemicals is achieved and that evaporation is controlled. Loss of output and efficiency may result if the controls are not effective. The standard cost of producing a 500-liter batch of Charger Power is $135. The standard materials mix and related standard cost of each chemical used in a 500-liter batch are: Chemical Std input quantity Std cost per liter Total cost Echol 200 $ 0.200 $ 40.00 Protex 100 0.425 42.50 Benz 250 0.150 37.50 CT-40 50 0.300 15.00 600 $ 135.00 The quantities of chemicals purchased and used during the current production period are shown in the schedule below. A total of 239 batches of Charger Power were manufactured during the current production period. The controller of BE has determined its costs and chemical usage variations at the end of the production period. Chemical Quantity Purchased Total Cost Quantity Used Echol 27,200 $ 6,850 28,700 Protex 15,200 7,725 15,080 Benz 42,200 7,325 39,900 CT-40 9,700 3,705 9,340 94,300 93,020 What is the total material mix variance?
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
The Becton Enterprises (BE) produces a gasoline additive, Charger Power. This product increases engine efficiency and improves gasoline mileage by creating a more complete burn in the combustion process. Careful controls are required during the production process to ensure that the proper mix of input chemicals is achieved and that evaporation is controlled. Loss of output and efficiency may result if the controls are not effective.
The
| Chemical | Std input quantity | Std cost per liter | Total cost | |||||||||||
| Echol | 200 | $ | 0.200 | $ | 40.00 | |||||||||
| Protex | 100 | 0.425 | 42.50 | |||||||||||
| Benz | 250 | 0.150 | 37.50 | |||||||||||
| CT-40 | 50 | 0.300 | 15.00 | |||||||||||
| 600 | $ | 135.00 | ||||||||||||
The quantities of chemicals purchased and used during the current production period are shown in the schedule below. A total of 239 batches of Charger Power were manufactured during the current production period. The controller of BE has determined its costs and chemical usage variations at the end of the production period.
| Chemical | Quantity Purchased | Total Cost | Quantity Used | |||||||||||
| Echol | 27,200 | $ | 6,850 | 28,700 | ||||||||||
| Protex | 15,200 | 7,725 | 15,080 | |||||||||||
| Benz | 42,200 | 7,325 | 39,900 | |||||||||||
| CT-40 | 9,700 | 3,705 | 9,340 | |||||||||||
| 94,300 | 93,020 | |||||||||||||
What is the total material mix variance?
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