Flight Café is a company that prepares in-flight meals for airlines in its kitch
ID: 2599601 • Letter: F
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: Flight Café Planning Budget For the Month Ended July 31 Budgeted meals (q) 23,000 Revenue ($3.90q) $ 89,700 Expenses: Raw materials ($2.10q) 48,300 Wages and salaries ($6,500 + $0.20q) 11,100 Utilities ($1,900 + $0.05q) 3,050 Facility rent ($3,000) 3,000 Insurance ($2,600) 2,600 Miscellaneous ($400 + $0.10q) 2,700 Total expense 70,750 Net operating income $ 18,950 In July, 24,000 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 (q) 24,000 Revenue ($3.90q) $ 93,600 Expenses: Raw materials ($2.10q) 50,400 Wages and salaries ($6,500 + $0.20q) 11,300 Utilities ($1,900 + $0.05q) 3,100 Facility rent ($3,000) 3,000 Insurance ($2,600) 2,600 Miscellaneous ($400 + $0.10q) 2,800 Total expense 73,200 Net operating income $ 20,400 Required: 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.) References eBook & Resources WorksheetDifficulty: 1 Easy
Explanation / Answer
3900 F
Activity Variance Budget Flexible Variance Revenue 89700 936003900 F
less:expense Raw materials 48300 50400 2100 U Wages and salaries 11100 11300 200 U Utilities 3050 3100 50 U Facility rent 3000 3000 0 NA Insurance 2600 2600 0 NA Miscellaneous 2700 2800 100 U Total expense 70750 73200 2450 U Net operating income 18950 20400 1450 FRelated Questions
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