Peterson Foods manufactures pumpkin scones. For January 2012, it budgeted to purchase and use 15,000 pounds of

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Peterson Foods manufactures pumpkin scones. For January 2012, it budgeted to purchase and use 15,000 pounds of pumpkin at $0.89 a pound. Actual purchases and usage for January 2012 were 16,000 pounds at $0.82 a pound. Peterson budgeted for 60,000 pumpkin scones. Actual output was 60,800 pumpkin scones.

Required

1. Compute the flexible-budget variance.

2. Compute the price and efficiency variances.

3. Comment on the results for requirements 1 and 2 and provide a possible explanation for them.

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Cost Accounting A Managerial Emphasis

ISBN: 9780273753872

14th Global Edition

Authors: Charles T. Horngren, Srikant M. Datar, Madhav V. Rajan

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