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) 25,000 $ 102,500 Revenue ($4.109) Expenses : Raw materials ($1.909) Wages and salaries ($6,100 + $0.209) Utilities ($2,200 + $0.059) Facility rent ($3,100) Insurance ($3,000) Miscellaneous ($700 + $0.109) Total expense Net operating income 47,500 11,100 3,450 3,100 3,000 3,200 71,350 $ 31,150 In July, 26,000 meals were actually served. The company's flexible budget for this level of activity appears below: Flight Café Flexible Budget For the Month Ended July 31 Budgeted meals (9) 26,000 $ 106,600 Revenue ($4.109) Expenses: Raw materials ($1.909) Wages and salaries ($6,100+ $0.209) Utilities ($2,200 $0.059) Facility rent ($3,100) Insurance ($3,000) Miscellaneous ($700 + $0.109) Total expense Net operating income 49,400 11,300 3,500 3,100 3,000 3,300 73,609 $ 33,000 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.)

Answer 1

the Activity Flexible budget Planning Budget variances $ 106,600 $ 102,500 $ 4,100 F Revenue Expenses: Raw materials Wages and salaries $ 47,500 $ 1,900 U $ 200 U Utilities Facility rent Insurance Miscellaneous Total expense Net operating income $ $ $ $ $ $ 49,400 $ 11,300 $ 3,500 $ 3,100 $ 3,000 $ 3,300 $ 73,600 $ 33,000 $ 11,100 $ 3,450 $ 3,100 $ 3,000 $ 3,200 $ 71,350 $ 31,150 $ 50 U None None 100 U 2,250 U 1,850 F