ces Exercise 9-2 (Algo) Activity Variances [LO9-2] Flight Café prepares in-flight meals for airlines and its planning budget for July appears below: Flight Café Planning Budget For the Month Ended July 31 Budgeted meals (q) Revenue ($4.20q) Expenses: Raw materials ($1.90q) Wages and salaries ($6,300 + $0.20q) Utilities ($1,800 + $0.05q) Facility rent ($3,900) Insurance ($2,400) Miscellaneous ($300 + $0.10q) Total expenses Net operating income 26,000 $ 109,200 49,400 11,500 3,100 3,900 2,400 2,900 73,200 $ 36,000 In July, 27,000 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) Revenue ($4.20g) Expenses: Raw materials ($1.90g) Wages and salaries ($6,300+ $0.20q) Utilities ($1,800 + $0.05q) Facility rent ($3,900) Insurance ($2,400) Miscellaneous ($300 + $0.10q) Total expenses Net operating income Required: 1. Calculate the company's activity variances for July. 27,000 $ 113,400 51,300 11,700 3,150 3,900 2,400 3,000 75,450 $ 37,950 Note: 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. Revenue Expenses: Raw materials Wages and salaries Utilities Facility rent Insurance Miscellaneous Total expenses Net operating income Flight Café Activity Variances For the Month Ended July 31
ces Exercise 9-2 (Algo) Activity Variances [LO9-2] Flight Café prepares in-flight meals for airlines and its planning budget for July appears below: Flight Café Planning Budget For the Month Ended July 31 Budgeted meals (q) Revenue ($4.20q) Expenses: Raw materials ($1.90q) Wages and salaries ($6,300 + $0.20q) Utilities ($1,800 + $0.05q) Facility rent ($3,900) Insurance ($2,400) Miscellaneous ($300 + $0.10q) Total expenses Net operating income 26,000 $ 109,200 49,400 11,500 3,100 3,900 2,400 2,900 73,200 $ 36,000 In July, 27,000 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) Revenue ($4.20g) Expenses: Raw materials ($1.90g) Wages and salaries ($6,300+ $0.20q) Utilities ($1,800 + $0.05q) Facility rent ($3,900) Insurance ($2,400) Miscellaneous ($300 + $0.10q) Total expenses Net operating income Required: 1. Calculate the company's activity variances for July. 27,000 $ 113,400 51,300 11,700 3,150 3,900 2,400 3,000 75,450 $ 37,950 Note: 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. Revenue Expenses: Raw materials Wages and salaries Utilities Facility rent Insurance Miscellaneous Total expenses Net operating income Flight Café Activity Variances For the Month Ended July 31
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter14: Decentralized Operations
Section: Chapter Questions
Problem 14.1E: Budget performance reports for cost centers Partially completed budget performance reports for...
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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