Reference no: EM132521866
Flight Café prepares in-flight meals for airlines in its kitchen located next to a local airport. The company's planning budget for July appears below:
Flight Café Planning Budget For the Month Ended July 31
Budgeted meals (q) 29,000
Revenue ($3.90q) $ 113,100
Expenses: Raw materials ($1.90q) 55,100
Wages and salaries ($6,100 + $0.20q) 11,900
Utilities ($1,900 + $0.05q) 3,350
Facility rent ($3,600) 3,600
Insurance ($2,700) 2,700
Miscellaneous ($600 + $0.10q) 3,500
Total expense 80,150
Net operating income $ 32,950
In July, 30,000 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) 30,000 Revenue ($3.90q) $ 117,000
Expenses: Raw materials ($1.90q) 57,000
Wages and salaries ($6,100+ $0.20q) 12,100
Utilities ($1,900 + $0.05q) 3,400
Facility rent ($3,600) 3,600
Insurance ($2,700) 2,700
Miscellaneous ($600 + $0.10q) 3,600
Total expense 82,400
Net operating income $ 34,600
Required:
Question 1. Calculate 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.)