Flight Café is a company that prepares in-flight meals for airlines in its kitch

Question

Flight Café is a company that prepares in-flight meals for airlines in its kitchen located next to the local airport. The company’s planning budget for July appears below:

In July, 24,000 meals were actually served. The company’s flexible budget for this level of activity appears below:

Compute 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.)

Flight Café is a company that prepares in-flight meals for airlines in its kitchen located next to the local airport. The company’s planning budget for July appears below:

Explanation / Answer

1) Planning Flexible Activity Budget budget variance Revenue 98,900 103,200 4,300 F Expense: Raw Materials 41,400 43,200 1,800 U Wages and salaries 10,800 11,000 200 U Utilities 3,050 3,100 50 U Factory rent 4,000 4,000 0 N Insurance 2,100 2,100 0 N Miscellaneous 2,600 2,700 100 U total expense 63,950 66,100 2,150 U Net income 34,950 37,100 2,150 F

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