Problem
Paulson Foods manufactures pumpkin scores. For January 2012, budgeted to purchase and use 14, 500 pounds of pumpkin at $0.87 a pound. Actual purchases and usage for January 2012 were 15, 250 pounds at $0.83 a pound. It budgets for 58,000 pumpkin scones. Actual output was 57, 950 pumpkin scones.
1. Compute the flexible-budget variance.
2. Compute the price and efficiency variances.