The Energy Products Company produces a gasoline additive, Gas Gain that increases engine efficiency and improves gasoline mileage. The actual and budgeted quantities (in litres) of materials required to produce Gas Gain and the budgeted prices of materials in August 2013 are as follows:

REQUIRED
1. Calculate the total direct materials efficiency variance for August 2013.
2. Calculate the total direct materials mix and yield variances for August 2013.
3. What conclusions would you draw from the variance analysis?

Transcribed Image Text:

Chemica Actual Quantity Budgeted Quantity udgeted Price Echol Protex Benz CT-40 24,080 15,480 36,120 10,320 25,200 16,800 33,600 8,400 0.22 0.47 0.17 0.32