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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) | 28,000 |
Revenue ($4.20q) | $ 117,600 |
Expenses: | |
Raw materials ($2.10q) | 58,800 |
Wages and salaries ($6,500 + $0.20q) | 12,100 |
Utilities ($1,900 + $0.05q) | 3,300 |
Facility rent ($3,200) | 3,200 |
Insurance ($2,900) | 2,900 |
Miscellaneous ($800 + $0.10q) | 3,600 |
Total expense | 83,900 |
Net operating income | $ 33,700 |
In July, 29,000 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) | 29,000 |
Revenue ($4.20q) | $ 121,800 |
Expenses: | |
Raw materials ($2.10q) | 60,900 |
Wages and salaries ($6,500+ $0.20q) | 12,300 |
Utilities ($1,900 + $0.05q) | 3,350 |
Facility rent ($3,200) | 3,200 |
Insurance ($2,900) | 2,900 |
Miscellaneous ($800 + $0.10q) | 3,700 |
Total expense | 86,350 |
Net operating income | $ 35,450 |
Required:
1. Calculate the companys activity variances for July.
Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.
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