Exercise 9-2 (Static) 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 (9) Revenue ($4.50q) Expenses: Raw materials ($2.409) Wages and salaries ($5,200 + $0.309) Utilities ($2,400 + $0.059) Facility rent ($4,300) Insurance ($2,300) Miscellaneous ($680 + $0.109) Total expenses Net operating income In July, 17,800 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 ($4.50g) Expenses: Raw materials ($2.40q) Wages and salaries ($5,200 + $0.309) Utilities ($2,400 + $0.059) Facility rent ($4,300) Insurance ($2,300) Miscellaneous ($680 + $0.109) Total expenses Net operating income 18,000 $ 81,000 43,200 10,600 3,300 4,300 2,300 2,480 66,180 $ 14,820 17,800 $ 80,100 42,720 10,540 3,290 4,300 2,300 2,460 65,610 $ 14,490 Required: 1. Calculate the company's activity variances for July. 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.
Exercise 9-2 (Static) 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 (9) Revenue ($4.50q) Expenses: Raw materials ($2.409) Wages and salaries ($5,200 + $0.309) Utilities ($2,400 + $0.059) Facility rent ($4,300) Insurance ($2,300) Miscellaneous ($680 + $0.109) Total expenses Net operating income In July, 17,800 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 ($4.50g) Expenses: Raw materials ($2.40q) Wages and salaries ($5,200 + $0.309) Utilities ($2,400 + $0.059) Facility rent ($4,300) Insurance ($2,300) Miscellaneous ($680 + $0.109) Total expenses Net operating income 18,000 $ 81,000 43,200 10,600 3,300 4,300 2,300 2,480 66,180 $ 14,820 17,800 $ 80,100 42,720 10,540 3,290 4,300 2,300 2,460 65,610 $ 14,490 Required: 1. Calculate the company's activity variances for July. 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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![Exercise 9-2 (Static) 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 (9)
Revenue ($4.50q)
Expenses:
Raw materials ($2.409)
Wages and salaries ($5,200 + $0.309)
Utilities ($2,400 + $0.059)
Facility rent ($4,300)
Insurance ($2,300)
Miscellaneous ($680 + $0.109)
Total expenses
Net operating income
In July, 17,800 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 ($4.50g)
Expenses:
Raw materials ($2.40q)
Wages and salaries ($5,200 + $0.309)
Utilities ($2,400 + $0.059)
Facility rent ($4,300)
Insurance ($2,300)
Miscellaneous ($680 + $0.109)
Total expenses
Net operating income
18,000
$ 81,000
43,200
10,600
3,300
4,300
2,300
2,480
66,180
$ 14,820
17,800
$ 80,100
42,720
10,540
3,290
4,300
2,300
2,460
65,610
$ 14,490
Required:
1. Calculate the company's activity variances for July.
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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F01105c61-16b2-4ed7-8b58-345531cf6846%2Ff8d952c0-9994-4f5a-8082-dd2b40fc23f8%2Fx0zt7v_processed.png&w=3840&q=75)
Transcribed Image Text:Exercise 9-2 (Static) 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 (9)
Revenue ($4.50q)
Expenses:
Raw materials ($2.409)
Wages and salaries ($5,200 + $0.309)
Utilities ($2,400 + $0.059)
Facility rent ($4,300)
Insurance ($2,300)
Miscellaneous ($680 + $0.109)
Total expenses
Net operating income
In July, 17,800 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 ($4.50g)
Expenses:
Raw materials ($2.40q)
Wages and salaries ($5,200 + $0.309)
Utilities ($2,400 + $0.059)
Facility rent ($4,300)
Insurance ($2,300)
Miscellaneous ($680 + $0.109)
Total expenses
Net operating income
18,000
$ 81,000
43,200
10,600
3,300
4,300
2,300
2,480
66,180
$ 14,820
17,800
$ 80,100
42,720
10,540
3,290
4,300
2,300
2,460
65,610
$ 14,490
Required:
1. Calculate the company's activity variances for July.
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.
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