Flight Café prepares in-flight meals for airlines in its kitchen located next to a local airport....

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Flight Café prepares in-flight meals for airlines in its kitchen located next to a local airport. The companys planning budg

In July, 22,000 meals were actually served. The companys flexible budget for this level of activity appears below: Flight Ca

Required: 1. Calculate the companys activity variances for July. (Indicate the effect of each variance by selecting F for

business accounting

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Answer 1

Answer #1

Activity variance is the difference between a revenue or cost item in the static/ planning budget and those in flexible budget at actual output.

Flight cafe Activity variance for the month ended July 31
	Planning Budget	Flexible Budget	Activity variance
Budgeted meals	21000	22000	1000	F
Revenue	79800	83600	3800	F
Expense
Raw material	42000	44000	2000	U
wages and salaries	10500	10700	200	U
utilities	3150	3200	50	U
Facility rent	3200	3200	0	None
Insurance	2300	2300	0	None
Miscellaneous	2800	2900	100	U
Total expense	63950	66300	2350	U
Net operating income	15850	17300	1450	F

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Answer 2

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