EXERCISE9-2 Prepare a Report ShowingActivityVariances Flight Cafe is a company that prepares in-flight meals for airlines in its kitchen located next to the local airport. The company's planning budget for July appears below: Flight Cafe Planning Budget For the Month Ended July 31 Budgeted meals (q) . 18,000 Revenue ($4.50q) . 81,000 Expenses: Raw materials ($2.40q) . 43,200 Wages and salaries ($5,200 + $0.30q) .10,600 Utilities ($2,400 + $0.05q) .3,300 Facility rent ($4,300) : . 4,300 Insurance ($2,300) . 2,300 Miscellaneous ($680 + $0.1Oq) . 2,480 Total expense . 66,180 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 Cafe Flexible Budget For the Month Ended July 31 Budgeted meals (q) . 17,800 Revenue ($4.50q) . 80,100 Expenses: Raw materials ($2.40q) . 42,720 Wages and salaries ($5,200 + $0.30q) . 10,540 Utilities ($2,400 + $0.05q) . 3,290 Facility rent ($4,300) . 4,300 Insurance ($2,300) . 2,300 Miscellaneous ($680 + $0.1Oq) . 2,460 Total expense . 65,610 Net operating income . 14,490 Required: 1. Prepare a report showing the company's activity variances for July. 2. Which of the activity variances should be of concern to management? Explain