Subs Catering operates a chain of 10 hospitals in the Los Angcks arca. Its contral food-catcring faciity, Subman, prcparcs and dclivers meals to the hospitals. It has the capacity to deliver up to 1,350,000 mcals a ycar. In 2014, basod on cstimates from cach hospital controlle Subman budgeted to 920 000 meals a year Budgeted ti costs in 2014 were $1.518 DDD Each hospital was charged $6 45 per mea?4 Bo nable costs plus $1 65 allocated budgeted fixed o t (Click the icon for additional information.) In 2015, only iH000 Subman meals were produced and sold to the hospitals. Smitn suspects that hospital controllers had systematicaly intlated their 2015 meal estimates Read the tequirememS { (Click the icon for ?dditional data Requirement 1. Rerall that Subman uses the master-budget capacity utilization to allocate txed costs and to prce meals what was the ettert ot production-volume vanance on Subman's operahng income in 20152 Determine the formule, then compute the effect of production volume variance on Subm?n operating income in 2015 (Abbreviation used Bud -Budgeted.) FIxed cast alocated using master-budget capacity Productiom- )volurie variance More Info Data Table Recently, the hospitals have been complaning about the quality of Subman's meals and their rising costs In mid 2014, Subs Catering's president announces that all Subs Catering hospitals ?nd support facilities will be run as profit centers. Hospitals will be free to purchase quality certified services from outside the system. Ron Srnith, Subman's controller, is preparing the 2015 budget. He hears that three hospitals have decided to use oulside supppliers for their reals, which will reduce the 2015 estimated demard o 825,000 rieals. No change in vble cosl per mel lolal fixed cosls is expecled iri 2015 2014 Master Practica 2015 Master Capacity Budge Budgeted fixed costs per meal$165110 S 184 Budget Print Done Print Done 5 Check