Question

# Flight Café is a company that prepares in-flight meals for airlines in its kitchen located next...

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) 29,000 Revenue (\$4.30q) \$ 124,700 Expenses: Raw materials (\$2.20q) 63,800 Wages and salaries (\$6,100 + \$0.20q) 11,900 Utilities (\$2,000 + \$0.05q) 3,450 Facility rent (\$3,400) 3,400 Insurance (\$2,000) 2,000 Miscellaneous (\$400 + \$0.10q) 3,300 Total expense 87,850 Net operating income \$ 36,850

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 (\$4.30q) \$ 129,000 Expenses: Raw materials (\$2.20q) 66,000 Wages and salaries (\$6,100 + \$0.20q) 12,100 Utilities (\$2,000 + \$0.05q) 3,500 Facility rent (\$3,400) 3,400 Insurance (\$2,000) 2,000 Miscellaneous (\$400 + \$0.10q) 3,400 Total expense 90,400 Net operating income \$ 38,600

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.)

#### Earn Coins

Coins can be redeemed for fabulous gifts.