Flight Caf prepares in-flight meals for airlines and its planning budget for July appears below: Flight Caf 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 + $0.10q) 2,480 Total expenses 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 Caf 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+ $0.30g) 10,540 Utilities ($2,400 + $0.05q) 3,290 Facility rent ($4,300) 4,300 Insurance ($2,300) 2,300 Miscellaneous ($680 + $0.10q) 2,460 Total expenses 65,610 Net operating income $14,490 Required: 1. Calculate the company's activity variances for July. (Hint: Refer to Exhibit 9-6.) 2. Which of the activity variances should be of concern to management? Explain.