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 248 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 27,400 $ 6,985 28,900 Protex 15,400 7,860 15,280 Benz 42,400 7,460 40,100 CT-40 9,900 3,840 9,540 95,100 93,820 Is the material mix variance favorable or unfavorable?
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 insure 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 248 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 | 27,400 | $ | 6,985 | 28,900 | ||||||||||
| Protex | 15,400 | 7,860 | 15,280 | |||||||||||
| Benz | 42,400 | 7,460 | 40,100 | |||||||||||
| CT-40 | 9,900 | 3,840 | 9,540 | |||||||||||
| 95,100 | 93,820 | |||||||||||||
Is the material mix variance favorable or unfavorable?
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