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) 21,000 $84,000 Revenue ($4.009) Expenses: Raw materials ($2.109) Wages and salaries ($6,400 + $0.209) Utilities ($1,900 + $0.059) Facility rent ($3,800) Insurance ($2,700) Miscellaneous ($500 + $0.109) Total expense Net operating income 44,100 10,600 2,950 3,800 2,700 2,600 66,750 $17,250 In July, 22,000 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) 22,000 $88,000 Revenue ($4.009) Expenses: Raw materials ($2.109) Wages and salaries ($6,400+ $0.209) Utilities ($1,900 + $0.059) Facility rent ($3,800) Insurance ($2,700) Miscellaneous ($500 + $0.109) Total expense Net operating income 46,200 10,800 3,000 3,800 2,700 2,700 69,200 $18,800

Answer 1

Solution:

IR SK Flight café Activity Variances For the month ended July 31 Flexible Budget (22000 Planning Budget meals) (21000 meals) $88,000.00 $84,000.00 8 Particulars Variances Fav. / Unfav. $4,000.00 F 9 Revenue 10 Expenses: 11 Raw Materials 12 Wages and salaries 13 | Utilities Facility rent Insurance 16 Miscellaneous 17 Total Expenses 14 $46,200.00 $10,800.00 $3,000.00 $3,800.00 $2,700.00 $2,700.00 $69,200.00 $44,100.00 $10,600.00 $2,950.00 $3,800.00 $2,700.00 $2,600.00 $66,750.00 $2,100.00 U $200.000 $50.00 U $0.00 None $0.00 None $100.00u $2,450.00 U 18 19 Net Operating Income $18,800.00 $17,250.00 $1,550.00 F 21 23 25 26 27 29 30 31 32 33 34 35 36 38 39 40 41 42 43 44 45 46 47 48 49 50 -36 (26) Sheet595 (3) Sheet770 Sheet771 Sheet772