West Texas Chemical Company manufactures a product called Kylon, which requires three raw materials. Production is in batches of 1,000 gallons of finished product. The firm uses standard costs as a control device. Its standard costs for materials for each batch of Kylon have been established as follows:

The output is packaged in 50-gallon drums. During the month of June 2019, 200 drums of Kylon were produced. There was no beginning or ending inventory of work in process. The materials actually used during June are listed below:

INSTRUCTIONS
1. Compute the total variance between the actual cost of the materials used during June and the standard cost of the materials. Also compute the total variance for each type of material.
2. Analyze the variances for each type of material for the month.
Analyze: Which raw materials were obtained at a price that was lower than standard cost?

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Standard Cost per Gallon Standard Cost per Batch Material Quantity $ 2.20 6.00 720 gal. 190 gal. 90 gal. 1,000 gal. Starter $1,584.00 1,140.00 Acid Activator Total standard cost 15.00 1,350.00 $4,074.00 Cost per Materlal Quantity Gallon Starter 7,270 gal. $ 2.00 Acid 1,940 gal. 6.60 Activator 630 gal. 19.50