The June budget, based on standard costs:

Budgeted Production	2,600 pasties
Direct materials	Dough$286 (0.25 Lbs. @ $0.44/Lb. x 2,600) Filling/spices$936 (0.75 Lbs. @ $0.48/Lb. x 2,600) Grouper fish--$5,200 (1/16 Lb. @ $32.00/Lb. x 2,600)
Direct Labor	$2,340 (0.05 DLH@ $18.00/Hr. x 2,600)
VOH	$1,875 (VOH allocated at $15.00 per DLH x 125 DLH)

At the end of the month, Jed's accountant sends him the following financial results (along with a bill for services):

Actual June performance of the central pastie kitchen:

Actual Production	2,500 pasties
Direct materials	Dough$315.00 (0.30 Lbs. @ $0.42/Lb. x 2,500) Filling/spices$1,050.00 (0.70 Lbs. @ $0.60/Lb. x 2,500) Grouper fish--$5,460.00 (.91 oz. @ $2.40/oz. x 2,500)
Direct Labor	$2,337.50 (0.055 DLH@ $17.00/Hr. x 2,500)
VOH	$1,893.00

Jed and his grandkids sit down and compare the actual numbers to the budget, and this is what they see:

UP NY Diner
Kitchen Performance Report
For the Month of June
	Actual	Budget	Variance
Direct Materials	Dough--$315.00 Filling/spices-- $1,050.00 Grouper fish--$5,460.00	Dough--$286.00 Filling/spices-- $936.00 Grouper fish--$5,200.00	$ 29.00 U $ 114.00 U $ 260.00 U
Direct labor	$2,337.50	$2,340.00	$ 2.50 F
Variable OH	$1,893.00	$1,875.00	$ 18.00 U
Total	$11,055.50	$10,637.00	$ 418.50 U

Jed takes a look at the numbers and shrugs. "The actual results are only about 4% over budget, and most of that is in the ingredients.Everything looks pretty good to me" he says.

Is Jed's analysis correct?

Required:

As Jed's trusted business advisor, addressed to Jed with your analysis of the current performance List of the include a financial analysis (including the variance analysis in Requirement B and any other important calculations) as an attached file or at the end of the with all your calculations.

1. Does the variance report reflect the actual performance of Janice Young and the central kitchen? Why or why not?
2. List a more useful variance analysis, and include it with your financial analysis. Your analysis should include the total budget variance as well as its price/rate/spending and quantity/efficiency component. The following format might be helpful:

Account	Actual cost	Flexible budget	Total Budget Variance	Price/Rate Variance	Qty/Efficiency Variance
Dough	$315.00
Filling/spices	$1,050.00
Grouper fish	$5,460.00
Direct labor	$2,337.50
Variable OH	$1,893.00
Total	$11,055.50

1. Summarize your findings from the financial analysis prepared for Requirement B (i.e., what does your report suggest about the various aspects of Janice's performance in the centralized kitchen?).
2. Interpret these findings. For example, are some variances more worrisome than others, what might have caused the variances, etc.