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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 CafPlanning BudgetFor the Month Ended July 31Budgeted meals (q)18,000Revenue ($4.50q)$ 81,000Expenses: Raw materials ($2.40q)43,200Wages and salaries ($5,200 + $0.30q)10,600Utilities ($2,400 + $0.05q)3,300Facility rent ($4,300)4,300Insurance ($2,300)2,300Miscellaneous ($680 + $0.10q)2,480Total expense66,180Net operating income$ 14,820
In July, 17,800 meals were actually served. The companys flexible budget for this level of activity appears below:
Flight CafFlexible BudgetFor the Month Ended July 31Budgeted meals (q)17,800Revenue ($4.50q)$ 80,100Expenses: Raw materials ($2.40q)42,720Wages and salaries ($5,200 + $0.30q)10,540Utilities ($2,400 + $0.05q)3,290Facility rent ($4,300)4,300Insurance ($2,300)2,300Miscellaneous ($680 + $0.10q)2,460Total expense65,610Net operating income$ 14,490
Required:
1. Calculate the companys activity variances for July. (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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