Question
Gamon Memorial Diner is a charity supported by donations that provides free meals to the homeless. The diners manager has just submitted the report presented
Gamon Memorial Diner is a charity supported by donations that provides free meals to the homeless. The diners manager has just submitted the report presented below, which compares the diners budget for February to the actual costs for February. The diners manager was very happy about the results because total actual costs were less than budgeted.
Cost category and budget assumptions | Budget 3,600 meals | Actual 3,200 meals |
Flexible Budget |
Groceries ($2.05 per meal) |
$ 7,380 |
$ 8,132 |
|
Kitchen operations ($4,700 + $1.15 per meal) |
8,840 |
8,350 |
|
Inspections and sanitizing ($500 per week) |
2,000 |
1,500 |
|
Administrative expenses ($2,700 + $0.70 per meal) |
5,220 |
4,960 |
|
Fundraising expenses ($1,700 per month) |
1,700 |
1,400 |
|
Total costs |
$ 25,140 |
$ 24,342 |
|
Prepare a flexible budget for the diner in the space provided above
As a highly trained MBA, do you share the joy of the diners manager? (circle yes or no below) YES NO
Which two variances would you investigate? Name the expense and BRIEFLY state why it would be important to investigate.
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