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)	23,000
Revenue ($4.00q)	$ 92,000
Expenses:
Raw materials ($2.00q)	46,000
Wages and salaries ($6,300 + $0.20q)	10,900
Utilities ($2,200 + $0.05q)	3,350
Facility rent ($3,200)	3,200
Insurance ($2,300)	2,300
Miscellaneous ($800 + $0.10q)	3,100
Total expense	68,850
Net operating income	$ 23,150

In July, 24,000 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)	24,000
Revenue ($4.00q)	$ 96,000
Expenses:
Raw materials ($2.00q)	48,000
Wages and salaries ($6,300+ $0.20q)	11,100
Utilities ($2,200 + $0.05q)	3,400
Facility rent ($3,200)	3,200
Insurance ($2,300)	2,300
Miscellaneous ($800 + $0.10q)	3,200
Total expense	71,200
Net operating income	$ 24,800

Required:

1. Calculate the companys activity variances for July. (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.)