The Foggybottom Chemicals Produces a Product by Mixing Three Ingredients

Essay

The Foggybottom Chemicals produces a product by mixing three ingredients to make a finished product.The standard cost of producing a 50-gallon drum of the product is $19.50.The standard materials mix and related standard cost of each chemical used in a 50-gallon batch are:

$$\begin{array} { | l | r | r | r | } \hline \text { Chemical } & \begin{array} { r } \text { Std imput } \\\text { quantity }\end{array} & \begin{array} { r } \text { Std cost } \\\text { per gal }\end{array} & \begin{array} { r } \text { Total } \\\text { cost }\end{array} \\\hline \text { A } & 30 & \$ 0.25 & \$ 7.50 \\\hline \text { B } & 20 & 0.45 & 9.00 \\\hline \text { C } & 10 & 0.30 & 3.00 \\\hline & \underline { 60 } & &\underline{ \$ 19.50 }\\\hline\end{array}$$ The quantities of chemicals purchased and used during the current production period are shown in the schedule below.A total of 520 batches were manufactured during the current production period.The costs and chemical usage variations at the end of the production period are:
$$\begin{array} { | l | r | r | r | } \hline \text { Chemical } & \begin{array} { r } \text { Quantity } \\\text { purchased }\end{array} & \begin{array} { r } \text { Total } \\\text { cost }\end{array} & \begin{array} { r } \text { Quantity } \\\text { used }\end{array} \\\hline \text { A } & 17,800 & \$ 4,365 & 16,600 \\\hline \text { B } & 13,000 & 6,240 & 11,880 \\\hline \text { C } & 5,500 & 1,520 & 5,140 \\\hline & \underline { 36,300 } & &\underline{ \$ 33,620} \\\hline\end{array}$$
Required:
(Be sure to indicate whether the variance is favorable or unfavorable. )
a.If variances are recorded at the earliest possible moment,what is the material price variance (in total and for each ingredient)?
b.What is the material efficiency variance (in total and for each ingredient)?
c.What is the materials yield variance (in total and for each ingredient)?
d.What is the materials mix variance (in total and for each ingredient)?