Price and efficiency variances. Peterson Foods manufactures pumpkin scones. For January 2007, it budgeted to purchase and use 15,000 kilograms ofpumpkin at $1.07 a kilogram; budgeted output was 60,000 scones. Actual purchase and use for January 2007 was 16,000 kilograms at

$0.98 a kilogram; actual output was 60,800 scones.

Required 1. Compute the flexible-budget variance.

2. Compute the price and efficiency variances.

3. Comment on the results in requirements 1 and 2.