The CEO of a business firm wants to increase the productivity of the employees while

c. pay-for-performance standard

Explanation:

Pay-for-performance compensation means that there is the payment is made that depend upon the performance. In this, the employee can get the incentive and reward for attaining the goals & objectives also at the same time they would be highly motivated to perform better

So as per the given situation, it is a pay-for performance standard situation

Answer and Explanation:

Given:

Budgeted Purchase = 14,750 pound at $0.92 per pound

Actual Purchase = 16,000 pound at $.85 per pound

Total budgeted output = 59,000 pumpkin

Total Actual output = 59,200 pumpkin

1. Computation of the flexible budget variance:

Actual cost of pumpkin - Standard cost of pumpkin

(Actual quantity × Actual rate) - [(Actual output / Budgeted output )( Budgeted quantity × Budgeted rate)]

( 16,000 × $0.85 ) - [( 59,200 / 59,000) / (14,750 × $0.92)]

$13,600 - [$13,616]

$16 (favorable)

2. Computation of the price variance:

Price variance = ( Standard rate - Actual rate ) × Actual quantity

Price variance = ( $0.92 - $0.85 ) × 16,000

Price variance = $1,120 (favorable)

3. Computation of efficiency variance:

Efficiency variance = [{(Actual output / Budgeted output )( Budgeted quantity)} - Actual quantity] × Standard rate

Efficiency variance = [{(59,200/ 59,000)(14,750)} - 16,000] × 0.92

Efficiency variance = [14,800 - 16,000] × 0.92

Efficiency variance = $1104 (unfavorable)