GRV is a chemical processing company that produces sprays used by farmers to protect their crops. One of these sprays is made by mixing three chemicals. The standard material cost details for 1 litre of this spray is as follows:

0.4 litres of chemical A @ 30 per litre	12.00
0.3 litres of chemical B @ 20 per litre	6.00
0.5 litres of chemical C @ 15 per litre	7.50
Standard material cost of 1 litre of spray	25.50

During August, GRV produced 1,000 litres of this spray using the following chemicals:

600 litres of chemical A costing 18,000

250 litres of chemical B costing 8,000

500 litres of chemical C costing 8,500

You are the Management Accountant of GRV and the Production Manager has sent you the following e-mail:

I was advised by our purchasing department that the worldwide price of chemical B had risen by 50%. As a result, I used an increased proportion of chemical A than is prescribed in the standard mix so that our costs were less affected by this price change.

1. Calculate the direct material yield