Doug's Diner is planning to expand operations and is concerned that its reporting system might need improvement. The master budget income statement for the Downtown Doug's, which contains a delicatessen and restaurant operation, follows (in thousands). Sales revenue Delicatessen $700 Restaurant Total $2,000 $2,700 Costs Purchases 385 1,100 1,485 Hourly wages 35 437 472 Franchise fee 21 40 61 Advertising 50 100 150 Utilities 49 63 112 Depreciation 25 38 63 Lease cost 15 25 40 Salaries 15 25 40 $595 $1,828 $2,423 $105 $ 172 $ 277 Total costs Operating profit The company uses the following performance report for management evaluation. DOWNTOWN DOUG'S Net Income for the Year (5000) Actual Results Over- or (Under-) Actual Results Delicatessen Restaurant Total Sales revenue $ 800 $1,000 $1,800 Budget $2,700 Budget $(900) Costs Purchasesb 465 400 865 1,485 $(620) Hourly wagesb 40 350 390 472 (82) Franchise feeb 24 30 54 61 (7) Advertising 50 100 150 150 Utilitiesb 53 50 103 112 (9) Depreciation Lease cost Salaries 25 38 63 63 15 25 40 40 15 25 40 40 Total costs $ 687 $1,018 $1,705 $2,423 Operating profit $ 113 $ (18) $ 95 $ 277 $(718) $(182) There is no sales price variance. b Variable costs; all other costs are fixed. Required: Prepare a profit variance analysis for the delicatessen segment. (Hint: Use sales revenue as your measure of volume.) (Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option. Do not round your intermediate calculations. Enter your answers in thousands of dollars.) Actual Purchases Variances Sales revenue $ 800 Variable costs: Purchases Hourly wages 465 40 Franchise fee 24 Utilities 53 Total variable costs $ 582 Contribution margin $ 218 Fixed costs: Advertising Marketing & Administrative Variances Flexible Activity Variance Budget Master Budget $ 700 385 35 21 49 $ 490 $ 210 50 50 Depreciation 25 25 Lease 15 15 Salaries 15 15 Total fixed costs $ 105 $ 105 Operating profit $ 113 $ 105