Air Meals is a company that prepares in-flight meals for airlines in its kitchen located next to the local airport. The companys planning budget for December appears below:

Air Meals Planning Budget For the Month Ended December 31
Budgeted meals (q)		22,000
Revenue ($3.80q)	$	83,600
Expenses:
Raw materials ($1.80q)		39,600
Wages and salaries ($6,400 + $0.20q)		10,800
Utilities ($1,800 + $0.05q)		2,900
Facility rent ($3,500)		3,500
Insurance ($2,600)		2,600
Miscellaneous ($400 + $0.10q)		2,600
Total expense		62,000
Net operating income	$	21,600

In December, 23,000 meals were actually served. The companys flexible budget for this level of activity is as follows:

Air Meals Flexible Budget For the Month Ended December 31

Budgeted meals (q)

23,000

Revenue ($3.80q)

$

87,400

Expenses:

Raw materials ($1.80q)

41,400

Wages and salaries ($6,400 + $0.20q)

11,000

Utilities ($1,800 + $0.05q)

2,950

Facility rent ($3,500)

3,500

Insurance ($2,600)

2,600

Miscellaneous ($400 + $0.10q)

2,700

Total expense

64,150

Net operating income

$

23,250

Air Meals
Activity Variances
For the Month Ended March 31
Revenue
Expenses:
Raw Materials
Wages and Salaries
Utilities
Facility Rent
Insurance
Miscellaneous
Total expense
Net Operating Income