Exercise 9-2 (Algo) Activity Variances [LO9-2]

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

Flight Caf
Planning Budget
For the Month Ended July 31
Budgeted meals (q)	30,000
Revenue ($4.20q)	$ 126,000
Expenses:
Raw materials ($2.10q)	63,000
Wages and salaries ($6,400 + $0.20q)	12,400
Utilities ($2,000 + $0.05q)	3,500
Facility rent ($3,400)	3,400
Insurance ($2,700)	2,700
Miscellaneous ($500 + $0.10q)	3,500
Total expense	88,500
Net operating income	$ 37,500

In July, 31,000 meals were actually served. The companys flexible budget for this level of activity appears below:

Flight Caf
Flexible Budget
For the Month Ended July 31
Budgeted meals (q)	31,000
Revenue ($4.20q)	$ 130,200
Expenses:
Raw materials ($2.10q)	65,100
Wages and salaries ($6,400+ $0.20q)	12,600
Utilities ($2,000 + $0.05q)	3,550
Facility rent ($3,400)	3,400
Insurance ($2,700)	2,700
Miscellaneous ($500 + $0.10q)	3,600
Total expense	90,950
Net operating income	$ 39,250

Required:

1. Calculate the companys activity variances for July.

Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.