Question

Powerful Foods manufactures pumpkin scones. For January 2020​, it budgeted to purchase and use 14,000 pounds of pumpkin at $0.85 a pound. Actual purchases and usage for January 2020 were 14,250 pounds at $0.82 a pound. Powerful budgeted for 56,000 pumpkin scones. Actual output was 51,300 pumpkin scones.Read the requirements

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.
× = Actual pumpkin costs
× =

Answer 1

The flexible-budget variance can be calculated by finding the difference between the actual cost and the budgeted cost. In this case, the flexible-budget variance is $245.

Step-by-step explanation:

To calculate the flexible-budget variance, we need to determine the difference between the actual cost and the budgeted cost. The formula to calculate the actual pumpkin costs is:

Actual pumpkin costs = Actual pounds of pumpkin used x Actual cost per pound

Using the given information, we can calculate the actual pumpkin costs:

Actual pounds of pumpkin used = 14,250 pounds

Actual cost per pound = $0.82

Actual pumpkin costs = 14,250 pounds x $0.82/pound = $11,655

The budgeted cost for January 2020 was $11,900 (14,000 pounds x $0.85/pound). Therefore, the flexible-budget variance is:

Flexible-budget variance = Budgeted cost - Actual cost = $11,900 - $11,655 = $245