Q1) EggzonMobul Incorporated uses Chemical X to produce oil products. Variance data for month follows (F indicates a favorable variance, U indicates unfavorable variance):
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Chemical X
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Materials Price Variance
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$84,000 F
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Materials Efficiency Variance
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80,000 U
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Net Materials Variance
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4,000 F
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The allowed quantity given the production of oil products
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200,000 lbs.
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Budget allowed one pound of Chemical X for each pound of oil product requiring Chemical X. For Chemical X, \ average price paid was $.40 per pound less than standard. Company bought and used all of Chemical X in the given period.
a) Compute number of pounds of Chemical X purchased.
b) Compute standard cost per pound of Chemical X.
c) Compute total standard material cost for Chemical X.