The Kinetic Modification Group (KMG)produces a Gasoline Additive,Gas Gain

question 52

Multiple Choice

The Kinetic Modification Group (KMG) produces a gasoline additive,Gas Gain.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 Gas Gain is $135.The standard materials mix and related standard cost of each chemical used in a 500-liter batch are: The quantities of chemicals purchased and used during the current production period are shown in the schedule below.A total of 140 batches of Gas Gain were manufactured during the current production period.The controller of KMG has determined its costs and chemical usage variations at the end of the production period. If KMG recognizes all variances at the earliest possible moment,what is the total material price variance?

• A)$160.
• B)$540.
• C)$890.
• D)$1,270.

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Definitions:

Pooled Estimate

A method to estimate a combined variance from two or more groups that assumes the groups have the same variance.

F Test

A statistical test used to determine if there are significant differences between the variances of two or more samples.

Experimental Procedures

Experimental procedures are systematic processes followed in scientific research to test hypotheses by manipulating and controlling variables.

Population Variances

Measures of the dispersion or spread of a set of data points in a population.