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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) | 29,000 | |
Revenue ($4.10q) | $ | 118,900 |
Expenses: | ||
Raw materials ($2.00q) | 58,000 | |
Wages and salaries ($6,100 + $0.20q) | 11,900 | |
Utilities ($2,100 + $0.05q) | 3,550 | |
Facility rent ($3,800) | 3,800 | |
Insurance ($2,800) | 2,800 | |
Miscellaneous ($700 + $0.10q) | 3,600 | |
Total expense | 83,650 | |
Net operating income | $ | 35,250 |
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 ($4.10q) | $ | 123,000 |
Expenses: | ||
Raw materials ($2.00q) | 60,000 | |
Wages and salaries ($6,100+ $0.20q) | 12,100 | |
Utilities ($2,100 + $0.05q) | 3,600 | |
Facility rent ($3,800) | 3,800 | |
Insurance ($2,800) | 2,800 | |
Miscellaneous ($700 + $0.10q) | 3,700 | |
Total expense | 86,000 | |
Net operating income | $ | 37,000 |
Required:
1. Calculate the companys activity variances for July. (Indicate the effect of each variance by select
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