1. Calculate deviation from flexible budget provisions. 2. Calculate price and efficiency deviations. 3. Comment on the results in paragraphs 1 and 2.

Essentials Of Investments
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Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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7.19 Price and efficiency deviations. Peterson Foods makes pumpkin pies. For January 2004, the company budgeted to buy and use 15,000 kg of
pumpkin at $0.89/kg. Quantities that actually were purchased and consumed were 16,000 kg at $0.82/kg. The budgeted production is 60,000
pies. Actual production was 60,800 pies.
Request
1. Calculate deviation from flexible budget provisions.
2. Calculate price and efficiency deviations.
3. Comment on the results in paragraphs 1 and 2.
Transcribed Image Text:7.19 Price and efficiency deviations. Peterson Foods makes pumpkin pies. For January 2004, the company budgeted to buy and use 15,000 kg of pumpkin at $0.89/kg. Quantities that actually were purchased and consumed were 16,000 kg at $0.82/kg. The budgeted production is 60,000 pies. Actual production was 60,800 pies. Request 1. Calculate deviation from flexible budget provisions. 2. Calculate price and efficiency deviations. 3. Comment on the results in paragraphs 1 and 2.
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