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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
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 Standard input quantity Standard cost per liter Total cost Echol Protex Benz CT-40 200 $ 0.200 $ 40.00 100 250 0.425 0.150 42.50 37.50 50 600 0.300 15.00 $ 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 Protex Benz 25,000 $ 5,365 26,600 13,000 6,240 12,880 40,000 5,840 37,800 CT-40 7,500 85,500 2,220 7,140 84,420 If BE recognizes all variances at the earliest possible moment, what is the total materials price variance?
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