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 СТ-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 140 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 25,000 $ 5,365 26,600 Protex 13,000 6,240 12,880 Benz 40,000 5,840 37,800 CT-40 7,500 2,220 7,140 85,500 84,420

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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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 140 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
25,000
$ 5,365
26,600
Protex
13,000
6,240
12,880
Benz
40,000
5,840
37,800
CT-40
7,500
2,220
7,140
85.500
84.420
Is the total material price variance favorable or unfavorable?
O Favorable.
O Unfavorable.
Transcribed Image Text: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 140 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 25,000 $ 5,365 26,600 Protex 13,000 6,240 12,880 Benz 40,000 5,840 37,800 CT-40 7,500 2,220 7,140 85.500 84.420 Is the total material price variance favorable or unfavorable? O Favorable. O Unfavorable.
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