Question

Flight Café 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 Café Planning Budget For the Month Ended July 31 Budgeted meals (9) 27,000 $121,500 Revenue ($4.509) Expenses: Raw materials ($2.109) Wages and salaries ($6,200 + $0.20g) Utilities ($1,900 + $0.059) Facility rent ($3,000) Insurance ($2,100) Miscellaneous ($600 + $0.10q) Total expense Net operating income 56,700 11,600 3,250 3,000 2,100 3,300 79,950 $ 41,550 In July, 28,000 meals were actually served. The company's flexible budget for this level of activity appears below:

Answer 1

Flight Care
Activity Variances
For the month ended July 31
	$
Revenue	4,500.00	F
Expenses:
Raw materials	2,100.00	U
Wages and Salaries	200.00	U
Utilities	50.00	U
Facility Rent	-	-
Insurance	-	-
Miscellaneous	100.00	U
Total Expense	2,450.00	U
Net Operating Income	2,050.00	F
Explanations
Flight Care
Activity Variances
For the month ended July 31
	Planning Budget	Flexible Budget	Activity Variances
	($)	($)
Meals (q)	27,000.00	28,000.00
Revenue ($4.50*q)	121,500.00	126,000.00	4,500.00	F
Expenses:
Raw materials ($2.10q)	56,700.00	58,800.00	2,100.00	U
Wages and Salaries [6200+(0.20*q)]	11,600.00	11,800.00	200.00	U
Utilities ($1,900 + $0.05q)	3,250.00	3,300.00	50.00	U
Facility Rent	3,000.00	3,000.00	-
Insurance	2,100.00	2,100.00	-
Miscellaneous ($600 + $0.10q)	3,300.00	3,400.00	100.00	U
Total Expense	79,950.00	82,400.00	2,450.00	U
Net Operating Income	41,550.00	43,600.00	2,050.00	F