6. Flight Café is a company that prepares in-flight meals for airlines in its ki

Question

6. 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 Planning Budget For the Month Ended July 31 Budgeted meals (q) Revenue ($4.30g) 27,000 s 116,100 Expenses Raw materials ($2.20q) Wages and salaries ($6,200 $0.20g) Utilities ($2,000+ $0.05q) Facility rent (S3,800) Insurance ($2,200) Miscellaneous (5500+ s0.10) 59,400 11,600 3,350 3,800 2,200 3,200 Total expense 83,550 Net operating income $32,550 In July, 28,000 meals were actually served The company's flexible budget for this level of activity appears below , Flight Cafeé Flexible Budget For the Month Ended July 31 28,000 s 120,400 Budgeted meals (q)

Explanation / Answer

Activity variance :

Revenue 4300 F Expense Raw material 2200 U Wages and salaries 200 U Utilities 50 U Facility rent None Insurance None Miscellaneous 100 U Total expense 2550 U Net operating income 1750 F

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