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

question 111

Multiple Choice

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.

$$\begin{array} { | l | r | r | r | } \hline \text { Chemical } & \text { Quantity Purchased } & \text { Total Cost } & \text { Quantity Used } \\\hline \text { Echol } & 25,000 & \$ 5,365 & 26,600 \\\hline \text { Protex } & 13,000 & 6,240 & 12,880 \\\hline \text { Benz } & 40,000 & 5,840 & 37,800 \\\hline \text { CT-40 } & \underline{7,500} & 2,220 & \underline{7,140} \\\hline & 85,500 & & 84,420 \\\hline\end{array}$$ What is the total materials yield variance?

• A) $388.50.
• B) $294.50.
• C) $280.00.
• D) $94.50.

Calculate the effects of intercompany sales and dividends on consolidated financial results.

Understand the accounting treatment for significant influence versus control in investments.

Determine consolidated retained earnings adjustments stemming from subsidiaries.

Explain strategic reasons for a parent company to own less than 100% of a subsidiary.

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Definitions:

Real Capital

Physical assets that are used in the production of goods and services, such as machinery, buildings, and equipment.

Vicious Circle

A complex sequence of negative events or conditions that reinforce each other, leading to a deteriorating situation or a series of worsening cycles.

Infrastructure Problem

Issues or challenges related to the basic facilities, services, and installations needed for the functioning of a community or society, like roads, bridges, and power supplies.

Capital Flight

The rapid movement of large sums of money or capital out of a country due to economic or political instability, affecting the country's financial health.