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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
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) | 21,000 |
---|---|
Revenue ($4.40q) | $ 92,400 |
Expenses: | |
Raw materials ($2.00q) | 42,000 |
Wages and salaries ($6,200 + $0.20q) | 10,400 |
Utilities ($2,200 + $0.05q) | 3,250 |
Facility rent ($3,100) | 3,100 |
Insurance ($2,400) | 2,400 |
Miscellaneous ($800 + $0.10q) | 2,900 |
Total expense | 64,050 |
Net operating income | $ 28,350 |
In July, 22,000 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) | 22,000 |
---|---|
Revenue ($4.40q) | $ 96,800 |
Expenses: | |
Raw materials ($2.00q) | 44,000 |
Wages and salaries ($6,200+ $0.20q) | 10,600 |
Utilities ($2,200 + $0.05q) | 3,300 |
Facility rent ($3,100) | 3,100 |
Insurance ($2,400) | 2,400 |
Miscellaneous ($800 + $0.10q) | 3,000 |
Total expense | 66,400 |
Net operating income | $ 30,400 |
Required:
1. Calculate the companys activity variances for July.
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