Question

# Flight Café prepares in-flight meals for airlines in its kitchen located next to a local airport....

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) 28,000 Revenue (\$4.00q) \$ 112,000 Expenses: Raw materials (\$2.00q) 56,000 Wages and salaries (\$6,200 + \$0.20q) 11,800 Utilities (\$1,900 + \$0.05q) 3,300 Facility rent (\$3,300) 3,300 Insurance (\$3,000) 3,000 Miscellaneous (\$700 + \$0.10q) 3,500 Total expense 80,900 Net operating income \$ 31,100

In July, 29,000 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) 29,000 Revenue (\$4.00q) \$ 116,000 Expenses: Raw materials (\$2.00q) 58,000 Wages and salaries (\$6,200+ \$0.20q) 12,000 Utilities (\$1,900 + \$0.05q) 3,350 Facility rent (\$3,300) 3,300 Insurance (\$3,000) 3,000 Miscellaneous (\$700 + \$0.10q) 3,600 Total expense 83,250 Net operating income \$ 32,750

Required:

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.)

 Flight Café Activity Variances For the Month Ended July 31 Revenue Expenses: Raw materials Wages and salaries Utilities Facility rent Insurance Miscellaneous Total expense Net operating income

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