Exercise 9-2 Activity Variances [LO9-2]

Flight Caf prepares in-flight meals for airlines in its kitchen located next to a local airport. The company's planning budget for July appears below:

Flight Caf Planning Budget for the Month Ended July 31

Budgeted Meals(q)18,000

Revenue($4.50)$ 81,000

Expenses:

Raw Materials($2.40)43,200

Wages & Salaries($5,200 + $ 0.30)10,600

Utilities($ 2400 + $ 0.05)3,300

Facility Rent($ 4,300)4,300

Insurance($ 2,300)2,300

Miscellaneous ($ 680 + $ 0.10)2,480

Total Expenses66,180

Net Operating Income$ 14,820

In July, 17,800 meals were actually served. The company's flexible budget for this level of activity appears below:

Flight Caf Planning Budget for the Month Ended July 31

Budgeted Meals(q)17,800

Revenue($4.50)$ 80,100

Expenses:

Raw Materials($2.40)42,720

Wages & Salaries($5,200 + $ 0.30)10,540

Utilities($ 2400 + $ 0.05)3,290

Facility Rent($ 4,300)4,300

Insurance($ 2,300)2,300

Miscellaneous($ 680 + $ 0.10)2,460

Total Expenses65,610

Net Operating Income$ 14,490

Required: 1. Calculate the company's activity variances for July

Flight Caf

Activity Variances

For the Month Ended July 31

Amount Code( F, None, U)

Revenue

Expenses

Raw Materials

Wages & Salaries

Utilities

Facility Rent

Insurance

Miscellaneous

Total Expenses

Net Operating Income