Question

Flight café prepares in-flight meais for alrines 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 (g) 24.000 Revenue ($4.00q) Expenses Raw materials ($2.20g) Wages and salaries ($6,400 $0.20) utilities ($2,000 + 多0.05g) Facility rent (83,400) Insurance ($2,200) Miscellaneous ($500 +0.10g) 52,800 11,200 3,200 3,400 2,200 2,900 75,700 20,300 Total expense Net operating income In July. 25,000 meals were actually served. The company's flexible budget for this level of activity appears below Plight Cate Flexible Budget For the Honth Ended July 33 Budgeted neale 25,000 Revense (4.00g Expenses Raw nateriale (52-20g Mages and aalaries (6.400 0.20)4 Utilities ($2,000 . 05g) Paeiiity rent 3.400 Inaurance 2,200) 5,00 3-480 2S0 400 2 200 Total expense set operating :75

Answer 1

Flight Café Activity Variances For the Month Ended July 31 Planning Flexible $96,000 $100,000 Variance Revenues $4,000 Favorable [Planning 24,000 x $4.00; Flexible 25,000 x $4.00)] Expenses $2,200 Unfavorable [Planning 24,000 x $2.20; Flexible 25,000 x $2.20] Raw Materials Wages & Salaries Utilities Facility Rent Insurance Miscellaneous $52,800 $55,000 $11,200 $11,400 $3,200 $3,250 $3,400 $3,400 $2,200 $2,200 $2,900 $3,000 $75,700 $78,250 $200 Unfavorable [Planning-$6,400+(24,000x$2.20); Flexible $6,400+ (25,000x$2.20)] $50 Unfavorable [Planning-$2,000+(24,000x$0.20); Flexible-$2,000+(25,000x$0.20)] $0 No Variance [Planning-$3,400 (Fixed); Flexible-$3,400 (Fixed)] $0 No Variance [Planning-$2,200 (Fixed); Flexible-$2,200 (Fixed)] $100 Unfavorable [Planning-$500+(24,000x$0.10); Flexible-$500+(25,000x$0.10)] Total Expenses $2,550 Unfavorable Net Operating Income $20,300 $21,750 $1,450 Favorable