Chemical Mix SP Standard Cost Echol 200 liters $0.200 $ 40.00 Protex 100 0.425 42.50 Benz 250 0.150 37.50 СТ-40 50 0.300 15.00 Total 600 liters $135.00 Chemical Quantity Used Echol 26,600 liters Protex 12,880 37,800 Benz CT-40 7,140 84,420 liters Total
Energy Products Company produces a gasoline additive, Gas Gain. 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. If the controls are not effective, there can be a loss of output and efficiency.The
The quantities of chemicals purchased and used during the current production period are shown in the following schedule. A total of 140 batches of Gas Gain were manufactured during the current production period. Energy Products determines its cost and chemical usage variations at the end of each production period.
Required:
Compute the total direct materials usage variance, and then break down this variance into its
mix and yield components. (CMA adapted)
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