Compute the company’s activity variances for July. (Indicate the effect of each

Question

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.)

1.

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 Planning Budget For the Month Ended July 31 Budgeted meals (q) Revenue ($4.50q) 18,000 $81,000 Expenses Raw materials ($2.40q) Wages and salaries ($5,200 $0.30q) Utilities ($2,400 +$0.05q) Facility rent ($4,300) Insurance ($2,300) Miscellaneous ($680$0.10g) 43,200 10,600 3,300 4,300 2,300 2,480 Total expense 66,180 Net operating income $ 14,820 In July, 17,800 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 (q) Revenue ($4.50q) 17,800 $80,100 Expenses Raw materials ($2.40q) Wages and salaries ($5,200 $0.30q) Utilities ($2,400 +$0.05q) Facility rent ($4,300) Insurance ($2,300) Miscellaneous ($680$0.10g) 42,720 10,540 3,290 4,300 2,300 2,460 Total expense 65,610 Net operating income $14,490

Explanation / Answer

Activity variances Revenue 900 U Expenses: Raw materials 480 F Wages and salaries 60 F Utilities 10 F Facility rent 0 None Insurance 0 None Miscellaneous 20 F Total expense 570 F Net operating income 330 U

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