Limpio, Inc., produces a key ingredient for liquid laundry detergents. Two chemical solutions, Chem A and Chem B, are mixed and heated to produce a cleansing chemical that is sold to companies that produce liquid detergents. The cleansing ingredient is produced in batches and has the following standards:

Required:
1. Compute the direct materials mix and yield variances.
2. Compute the total direct materials usage variance for Chem A and Chem B.
Show that the total direct materials usage variance is equal to the sum of the direct materials mix and yield variances.

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Direct Material Standard Mix Standard Unit Price Standard Cost Chem A 15,000 gallons $2.00 per gallon $30,000 Chem B 5,000 3.00 15,000 Total 20,000 gallons $45,000 15,000 gallons Yield During March, the following actual production information was provided: Direct Material Actual Mix Chem A 140,000 gallons Chem B 60,000 Total 200,000 gallons Yield 158,400 gallons