Fligt Cata is a commpany that preparea in-tight meals for arines in ta ktchan lo

Question

Fligt Cata is a commpany that preparea in-tight meals for arines in ta ktchan located next to tha local airport. The companya planning budgat for July appoars below Flight Cats Planning Budgat For tha Month Endad July 31 Budgared meals (a) Raanue (54.50a) Expontos: 5108,000 Raw materials ($2.00q) Wages and salarios (55200 $0.20a) Utlitios ($1,800 $0.054) Faolity ront (53,900) Insuranco ($2,900 Miscolaneous ($500+$0.10q) 48,000 11,000 3,000 3,900 2,900 Total expense Nat oparating ncome $ 36,300 In July, 26,000 meala wore aatually served. The company's fexible budge for this lovl of actvity appoars bolow: Fight Cato Flaxblo Budget For tho Month Ended July 31 Budgeted meals ( Ravenue (S4.504) Expense: Raw materials ($2.00q) wages and Balanes (36.200 . $0.20g) Utlities (31,800 S0.05q) Faclity rent (S3,900) Insurance($2,900 Miscelaneous ($500+S0.10) 25.000 $112 500 50.000 11 200 3.900 2.900 Total expense Not oporating incomo $38450 Required 1. Compute the company's activity variances for July. Indicate the effect of eech variance by selecting "F* for favorable, "U" for unfavorable, and "None" for no effect (l.e., zero varlance). Input all amounts as positive values. Revenue Exponsca: Raw maerials Wagos and Faciity Insurance

Explanation / Answer

Activity variances Revenue 4500 F Expenses: Raw materials 2000 U Wages and salaries 200 U Utilities 50 U Facility rent 0 None Insurance 0 None Miscellaneous 100 U Total expenses 2350 U Net operating income 2150 F

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