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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 ($3.80q) | $ 106,400 |
Expenses: | |
Raw materials ($2.30q) | 64,400 |
Wages and salaries ($6,000 + $0.20q) | 11,600 |
Utilities ($2,000 + $0.05q) | 3,400 |
Facility rent ($3,200) | 3,200 |
Insurance ($2,900) | 2,900 |
Miscellaneous ($700 + $0.10q) | 3,500 |
Total expense | 89,000 |
Net operating income | $ 17,400 |
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 ($3.80q) | $ 110,200 |
Expenses: | |
Raw materials ($2.30q) | 66,700 |
Wages and salaries ($6,000+ $0.20q) | 11,800 |
Utilities ($2,000 + $0.05q) | 3,450 |
Facility rent ($3,200) | 3,200 |
Insurance ($2,900) | 2,900 |
Miscellaneous ($700 + $0.10q) | 3,600 |
Total expense | 91,650 |
Net operating income | $ 18,550 |
Required:
1. Calculate the companys activity variances for July.
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