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Flight Caf prepares in-flight meals for airlines in its kitchen located next to a local airport. The company's 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 company's planning budget for July appears below: Flight Caf Planning Budget For the Month Ended July 31 Budgeted meals (q) 23,000 $ 89,700 Revenue ($3.90q) Expenses: Raw materials ($1.80q) 41,400 11,000 3,150 Wages and salaries ($6,400 + $0.20q) Utilities ($2,000+ $0.05q) Facility rent ($3,200) Insurance ($2,400) 3,200 2,400 Miscellaneous ($500 + $0.10q) 2,800 Total expense 63,950 Net operating income $ 25,750 In July, 24,000 meals were actually served. The company's flexible budget for this level of activity appears below: Flight Caf Flexible Budget For the Month Ended July 31 Budgeted meals (q) 24,000 Revenue ($3.90q) $ 93,600 Expenses: Raw materials ($1.80q) 43,200 11, 200 Wages and salaries ($6,400+ $0.20g) Utilities ($2,000+ $0.05q) 3,200 Facility rent ($3,200) 3,200 Insurance ($2,400) 2,400 Miscellaneous ($500 + $0.10q) 2,900 Total expense 66, 100 Net operating income $ 27,500 Required: 1. Calculate the company's 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.) Revenue Expenses: Flight Caf Activity Variances For the Month Ended July 31 Raw materials Wages and salaries Utilities Facility rent Insurance Miscellaneous Total expense Net operating income
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