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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) | 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 expense | 66,180 |
Net operating income | $ 14,820 |
In July, 17,800 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) | 17,800 |
Revenue ($4.50q) | $ 80,100 |
Expenses: | |
Raw materials ($2.40q) | 42,720 |
Wages and salaries ($5,200 + $0.30q) | 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 expense | 65,610 |
Net operating income | $ 14,490 |
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.
Flight Caf | ||
Activity Variances | ||
For the Month Ended July 31 | ||
Revenue | ||
Expenses: | ||
Raw materials | ||
Wages and salaries | ||
Utilities | ||
Facility rent | ||
Insurance | ||
Miscellaneous | ||
Total expense | ||
Net operating income |
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