Reference no: EM132650015

Flight Cafe Planning Budget For the Month Ended July 31 Budgeted meals (q) 25, 000 Revenue ($3. 80q) $95, 900 Expenses : Raw materials ($1. 80q) 45, 900 Wages and salaries ($6,000 + $0.20q) 11, 000 Utilities ($2, 200 + $0.05q) 3,450 Facility rent ($3,500) 3,500 Insurance ($2, 200) 2, 200 Miscellaneous ($500 + $0.10q) 3,000 Total expense 68,150 Net operating income $26, 850 In July, 26,000 meals were actually served.

The company's flexible budget for this level of activity appears below:

Flight Cafe Flexible Budget For the Month Ended July 31 Budgeted meals (q) 26,900

Revenue ($3. 80q) $98, 800

Expenses :

Raw materials ($1. 80q) 46, 800

Wages and salaries ($6, 000+ $0.20q) 11, 200

Utilities ($2, 200 + $0.05q) 3,500

Facility rent ($3,500) 3,500

Insurance ($2, 200) 2, 200

Miscellaneous ($500 + $0.10q) 3,100

Total expense 70,300 Net operating income $28, 500

Required:

Question 1. Calculate the company's activity variances for July.