Falafel Hut operates fast food restaurants in the food courts of shopping malls. Its main product is a serving of falafel that

requires ground chick peas (direct material) and food preparation (direct labor). The April budget for Falafel Hut’s

Parkside restaurant was:

• Sales 30,600 servings at $4.50 each

• Standard food cost of $0.75 per serving (1/3 pound @ $2.25 per pound)

• Standard direct labor of $0.50 per serving (1/30th hour @ $15.00 per hour)

• Fixed occupancy expenses (equip and rent) of $8,000

Actual April performance of the Parkside restaurant was:

• Sales 27,000 servings at $4.80 each

• Food cost of $18,490 for 8,600 pounds

• Direct labor cost of $15,675 for 1,100 hours

• Fixed occupancy expenses of $8,200

1. Develop and show in one appendix the Actual, Flexible Budget, and Static Budget figures in the contribution margin format for Falafel Hut in April.

2. Show all the static budget, the flexible budget, and sales volume variances.

3. Analyze the direct materials usage and show price and efficiency variances.

4. Analyze the direct labor usage and show labor rate and labor efficiencies variances.
 

In early May, the manager received the following financial performance report: FALAFEL HUT PARKSIDE Performance Report For the Month of April Actual $ 129,600 (18,490) (15,675) (8,200) $ 87,235 Revenues Food Cost Labor Cost Occupancy Profit Budgeted $137,700 (22,950) (15,300) (8,000) $ 91,450 Variance $ 8,100 U 4,460 F 375 U 200 U $ 4,215 U