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QUESTION
Price and efficiency variances. Peterson Foods manufactures pumpkin scones. For January 2013, it budgeted to purchase and use 16,000 kilograms of...
Price and efficiency variances. Peterson Foods manufactures pumpkin scones. For January 2013, it budgeted to purchase and use 16,000 kilograms of pumpkin at $1.11 per kilogram; budgeted output was 60,000 scones. Actual purchases and use for January 2013 was 17,000 kilograms at 0.99 per kilogram; actual output was 60,800 scones.
REQUIRED
1. Calculatetheflexible-budgetvariance.
2. Calculate the price and efficiency variances
3. Comment on the results in requirements 1 and 2.
