4. Assume the role of manageméht Geller? Should he be more concerned? If so, why? 7-26 Price and efficiency variances. Sunshine Foods manufactures pumpkin scones. For January 201" it budgeted to purchase and use 14,750 pounds of pumpkin at $0.92 a pound. Actual purchases and usac for January 2017 were 16,000 pounds at $0.85 a pound. Sunshine budgeted for 59,000 pumpkin scone Actual output was 59,200 pumpkin scones. 1. Compute the flexible-budget variance. 2. Compute the price and efficiency variances. 3. Comment on the results for requirements 1 and 2 and provide a possible explanation for them.
4. Assume the role of manageméht Geller? Should he be more concerned? If so, why? 7-26 Price and efficiency variances. Sunshine Foods manufactures pumpkin scones. For January 201" it budgeted to purchase and use 14,750 pounds of pumpkin at $0.92 a pound. Actual purchases and usac for January 2017 were 16,000 pounds at $0.85 a pound. Sunshine budgeted for 59,000 pumpkin scone Actual output was 59,200 pumpkin scones. 1. Compute the flexible-budget variance. 2. Compute the price and efficiency variances. 3. Comment on the results for requirements 1 and 2 and provide a possible explanation for them.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
7-26
Transcribed Image Text:**Price and Efficiency Variances**
Sunshine 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. Sunshine budgeted for 59,000 pumpkin scones. Actual output was 59,200 pumpkin scones.
1. Compute the flexible-budget variance.
2. Compute the price and efficiency variances.
3. Comment on the results for requirements 1 and 2 and provide a possible explanation for them.
---
**Materials and Manufacturing Labor Variances**
Consider the following data collected for Green Homes, Inc.:
- Cost incurred: Actual inputs × actual prices
- Direct Materials: $200,000
- Direct Manufacturing Labor: $90,000
(Note: The table below these costs in the image is not fully visible for a detailed explanation or transcription.)
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