Ned Zechman is the dietary manager of a large convalescent center. He is disturbed by variances, all highly unfavorable, in his food budget for the past 3 months. Zechman has been reducing both the quantity and quality of delivered meals, but to date, there has been no reflection of this in his monthly budget variance report.

A recent organizational change brought in Pat Schumaker, who is now responsible for all purchasing activity, including dietary. All purchased food costs are charged to dietary at the time of purchase. What do you think might explain Zechman’s problem, and how would you determine the cause?