Behavioral Aspects of Standard Costing

Section B - Case 3: UrbanTransit UrbanTransit operates a fleet of municipal buses. The company uses a standard costing system to monitor fuel costs. At the start of the year, the original standard price for diesel was set at $2.00 per liter. Mid-year, due to a global geopolitical shock, the market price of diesel surged. Management revised the standard price to $2.50 per liter to reflect uncontrollable market conditions. During the last quarter, UrbanTransit purchased and used 100,000 liters of diesel at an actual total cost of $260,000. What is the most likely behavioral impact of revising the standard price from $2.00 to $2.50 mid-year?