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 insure 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: $$\begin{array} { | l | r | r | r | }
\hline \text { Chemical } & \begin{array} { r }
\text { Std imput } \
\text { cuantly }
\end{array} & \begin{array} { r }
\text { Std cost } \
\text { per liter }
\end{array} & \begin{array} { r }
\text { Total } \
\text { cost }
\end{array} \
\hline \text { Echol } & 200 & \$ 0.200 & \$ 40.00 \
\hline \text { Protex } & 100 & 0.425 & 42.50 \
\hline \text { Benz } & 250 & 0.150 & 37.50 \
\hline \text { CT-40 } & 50 & 0.300 & 15.00 \
\hline & \underline{600} & & \underline{\$ 135.00 }\
\hline
\end{array}$$ 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.

$$\begin{array} { | l | r | r | r | }
\hline \text { Chemical } & \text { Quantity Purchased } & \text { Total Cost } & \text { Quantity Used } \
\hline \text { Echol } & 25,000 & \$ 5,365 & 26,600 \
\hline \text { Protex } & 13,000 & 6,240 & 12,880 \
\hline \text { Benz } & 40,000 & 5,840 & 37,800 \
\hline \text { CT-40 } &\underline{ 7,500} & 2,220 &\underline{ 7,140 }\
\hline & 85,500 & & 84,420 \
\hline
\end{array}$$If BE recognizes all variances at the earliest possible moment,what is the total material price variance?
A) $160.
B) $540.
C) $890.
D) $1,270.

Question

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 insure 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: $$\begin{array} { | l | r | r | r | } 
\hline \text { Chemical } & \begin{array} { r } 
\text { Std imput } \
\text { cuantly }
\end{array} & \begin{array} { r } 
\text { Std cost } \
\text { per liter }
\end{array} & \begin{array} { r } 
\text { Total } \
\text { cost }
\end{array} \
\hline \text { Echol } & 200 & \$ 0.200 & \$ 40.00 \
\hline \text { Protex } & 100 & 0.425 & 42.50 \
\hline \text { Benz } & 250 & 0.150 & 37.50 \
\hline \text { CT-40 } & 50 & 0.300 & 15.00 \
\hline & \underline{600} & & \underline{\$ 135.00 }\
\hline
\end{array}$$ 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.

$$\begin{array} { | l | r | r | r | } 
\hline \text { Chemical } & \text { Quantity Purchased } & \text { Total Cost } & \text { Quantity Used } \
\hline \text { Echol } & 25,000 & \$ 5,365 & 26,600 \
\hline \text { Protex } & 13,000 & 6,240 & 12,880 \
\hline \text { Benz } & 40,000 & 5,840 & 37,800 \
\hline \text { CT-40 } &\underline{  7,500} & 2,220 &\underline{ 7,140 }\
\hline & 85,500 & & 84,420 \
\hline
\end{array}$$If BE recognizes all variances at the earliest possible moment,what is the total material price variance?
A) $160.
B) $540.
C) $890.
D) $1,270.

Quizplus · Accepted Answer

The total material price variance is calculated by comparing the actual cost of materials purchased to the standard cost of those materials. The formula is: (Actual Quantity Purchased x Actual Price) - (Actual Quantity Purchased x Standard Price). Calculating for each chemical and summing the variances gives a total material price variance of $890.

The Becton Enterprises (BE)produces a Gasoline Additive,Charger Power The Quantities of Chemicals Purchased and Used During the Current