MeadowMeadow

Foods manufactures pumpkin scones. For January 2017, it budgeted to purchase and use 14,750 pounds of pumpkin at $0.92 a pound. Actual purchases and usage for January 2017 were 16,000 pounds at $0.85 a pound. Meadow budgeted for 59,000 pumpkin scones. Actual output was 59,200 pumpkin scones.Read the requirements

Requirement 1. Compute the flexible-budget variance.

Let's begin by determining the formula used to calculate the actual pumpkin costs, then enter the amounts in the formula and calculate the cost.

		x		=	Actual pumpkin costs
		x		=

Now determine the formula and calculate the pumpkin costs that will be found in the static budget column of your analysis.

		x		=	Static budget pumpkin costs
		x		=

Determine the formula and calculate the pumpkin costs for the flexible budget. (Round your answer to the nearest whole dollar.)

		x		=	Flexible budget pumpkin costs
		x		=

Now enter the amounts above into the analysis and determine the flexible-budget variance. (Round your answers to the nearest whole dollar. Label each variance as favorable (F) or unfavorable (U).)

	Actual	Flexible-Budget		Flexible	Sales-Volume		Static
	Results	Variance		Budget	Variance		Budget
Pumpkin costs

Requirement 2. Compute the price and efficiency variances.

Begin by completing the following table. (Round your answer to the nearest whole dollar. Abbreviation used: Qty = quantity)

	Actual Input Qty
Actual	x		Flexible
Costs	Budgeted Price		Budget

The price variance is $

(Label the variance as favorable (F) or unfavorable (U).)

The efficiency variance is $

(Label the variance as favorable (F) or unfavorable (U).)

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

The			price variance reflects the actual purchase cost being						the budgeted purchase cost per pound.
The			efficiency variance reflects the actual materials yield being							the budgeted yield. The company
used		pumpkins (materials) to make the scones than was budgeted.
One explanation may be that Meadow purchased					quality pumpkins at a					cost per pound.

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