Question

# Exercise 9-2 Activity Variances [LO9-2] Flight Café prepares in-flight meals for airlines in its kitchen located...

Exercise 9-2 Activity Variances [LO9-2]

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) 25,000 Revenue (\$4.50q) \$ 112,500 Expenses: Raw materials (\$2.10q) 52,500 Wages and salaries (\$6,300 + \$0.20q) 11,300 Utilities (\$2,000 + \$0.05q) 3,250 Facility rent (\$3,200) 3,200 Insurance (\$2,600) 2,600 Miscellaneous (\$500 + \$0.10q) 3,000 Total expense 75,850 Net operating income \$ 36,650

In July, 26,000 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) 26,000 Revenue (\$4.50q) \$ 117,000 Expenses: Raw materials (\$2.10q) 54,600 Wages and salaries (\$6,300+ \$0.20q) 11,500 Utilities (\$2,000 + \$0.05q) 3,300 Facility rent (\$3,200) 3,200 Insurance (\$2,600) 2,600 Miscellaneous (\$500 + \$0.10q) 3,100 Total expense 78,300 Net operating income \$ 38,700

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.)

#### Homework Answers

Answer #1

Answer:

 Flight Cafe Activity Variance For the Month Ended July 31 Particulars Planning budget Flexible budget Activity variances Meals 25000 26000 Total revenue (\$4.50q) 112500 117000 4500 F Less: Expenses: Raw materials (\$2.10q) 52500 54600 2100 U Wages and Salaries (6300+\$0.20q) 11300 11500 200 U Utilities (2000+\$0.05q) 3250 3300 50 U Facility rent (3200) 3200 3200 0 Insurance (2600) 2600 2600 0 Miscellaneous (500+0.10q) 3000 3100 100 U Total expenses 75850 78300 2450 U Net operating Income 36650 38700 2050 F
Know the answer?
Your Answer:

#### Post as a guest

Your Name:

What's your source?

#### Earn Coins

Coins can be redeemed for fabulous gifts.

##### Not the answer you're looking for?
Ask your own homework help question
ADVERTISEMENT
##### Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

ADVERTISEMENT
##### Active Questions
• Suppose Appin coal mine values their coal extraction benefits as: Amount \$18,000(YEAR 1)   \$23,000 (YEAR 2)...
asked 2 minutes ago
• why thermal conductivity decreases when the temperature difference increases
asked 2 minutes ago
• The Milgram StudyPrepare a convincing argument supporting each of these positions: The Milgram study should have...
asked 2 minutes ago
• You would like to estimate the mean price of milk (per gallon) in your city. You...
asked 5 minutes ago
• Need to see step by step solutions Please: Solve Problem and Applications: ch 13- prob 7...
asked 5 minutes ago
• Which of the following IRA distributions is exempt from the 10% early withdrawal penalty? Hardship withdrawal...
asked 5 minutes ago
• Reuben bought a table on sale for \$627 This price was 24% less than the original...
asked 5 minutes ago
• . GOLDMEDAL Company estimated demand for gold-filled medals. The demand is 2,420 medal per year. Manager...
asked 6 minutes ago
• Thickness measurements of ancient prehistoric Native American pot shards discovered in a Hopi village are approximately...
asked 6 minutes ago
• A particularly long traffic light on your morning commute is green 20% of the time that...
asked 7 minutes ago
• False imprisonment and intentional infliction of emotional distress are examples of which of the following? criminal...
asked 10 minutes ago
• What is the difference between a bacterial strain that is resistant to penicillin and one that...
asked 10 minutes ago