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Flight Caf is a company that prepares in-flight meals for airlines in its kitchen located next to the local airport. The companys planning budget for
Flight Caf is a company that prepares in-flight meals for airlines in its kitchen located next to the local airport. The companys planning budget for July appears below: |
Flight Caf Planning Budget For the Month Ended July 31 | ||
Budgeted meals (q) | 29,000 | |
Revenue ($4.40q) | $ | 127,600 |
Expenses: | ||
Raw materials ($2.10q) | 60,900 | |
Wages and salaries ($6,200 + $0.20q) | 12,000 | |
Utilities ($2,000 + $0.05q) | 3,450 | |
Facility rent ($3,100) | 3,100 | |
Insurance ($2,300) | 2,300 | |
Miscellaneous ($600 + $0.10q) | 3,500 | |
Total expense | 85,250 | |
Net operating income | $ | 42,350 |
In July, 30,000 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) | 30,000 | |
Revenue ($4.40q) | $ | 132,000 |
Expenses: | ||
Raw materials ($2.10q) | 63,000 | |
Wages and salaries ($6,200 + $0.20q) | 12,200 | |
Utilities ($2,000 + $0.05q) | 3,500 | |
Facility rent ($3,100) | 3,100 | |
Insurance ($2,300) | 2,300 | |
Miscellaneous ($600 + $0.10q) | 3,600 | |
Total expense | 87,700 | |
Net operating income | $ | 44,300 |
Required: | |
1. | Compute the companys activity variances for July. |
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