Flexible Budgets and Performance Analysis EXERCISE 9-2 Prepare a Report Showing Activity Variances [L09-2] Flight Café is a company that prepares in-flight meals for airlines in its kitchen located next to the jocal airport. The company's planning budget for July appears below: 413 on the number of custom- estimates that it uses for Flight Café Planning Budget For the Month Ended July 31 ment Budgeted meals (q) . .. Revenue ($4.50q) ner Actual Total 18,000 for May Expenses: Raw materials ($2.40q) Wages and salaries ($5,200 + $0.30g) Utilities ($2,400+ $0.05g) Facility rent ($4,300). Insurance ($2,300) . Miscellaneous ($680 + $0.10q) $81,000 $160,000 $88,000 $19,000 $34,500 43,200 10,600 3,300 4,300 2,300 2,480 . 30 customers per Total expense 66,180 $14,820 Net operating income ay? budget for May? for May? Cor May? Te 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 17,800 Budgeted meals (q) Revenue ($4.50q) $80,100 Expenses: Raw materials ($2.40q) Wages and salaries ($5,200 + $0.30q) Utilities ($2,400 + $0.05q) .... Facility rent ($4,300)... Insurance ($2,300) .. Miscellaneous ($680 + $0.10q).... 42,720 10,540 3,290 4,300 2,300 2,460 ing budget May? May? 65,610 . $14,490 Total expense Net operating income .... Required: 1. Prepare a report showing the company's activity variances for July. 2. Which of the activity variances should be of concern to management? Explain.
Flexible Budgets and Performance Analysis EXERCISE 9-2 Prepare a Report Showing Activity Variances [L09-2] Flight Café is a company that prepares in-flight meals for airlines in its kitchen located next to the jocal airport. The company's planning budget for July appears below: 413 on the number of custom- estimates that it uses for Flight Café Planning Budget For the Month Ended July 31 ment Budgeted meals (q) . .. Revenue ($4.50q) ner Actual Total 18,000 for May Expenses: Raw materials ($2.40q) Wages and salaries ($5,200 + $0.30g) Utilities ($2,400+ $0.05g) Facility rent ($4,300). Insurance ($2,300) . Miscellaneous ($680 + $0.10q) $81,000 $160,000 $88,000 $19,000 $34,500 43,200 10,600 3,300 4,300 2,300 2,480 . 30 customers per Total expense 66,180 $14,820 Net operating income ay? budget for May? for May? Cor May? Te 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 17,800 Budgeted meals (q) Revenue ($4.50q) $80,100 Expenses: Raw materials ($2.40q) Wages and salaries ($5,200 + $0.30q) Utilities ($2,400 + $0.05q) .... Facility rent ($4,300)... Insurance ($2,300) .. Miscellaneous ($680 + $0.10q).... 42,720 10,540 3,290 4,300 2,300 2,460 ing budget May? May? 65,610 . $14,490 Total expense Net operating income .... Required: 1. Prepare a report showing the company's activity variances for July. 2. Which of the activity variances should be of concern to management? Explain.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
9-2
![Flexible Budgets and Performance Analysis
EXERCISE 9-2 Prepare a Report Showing Activity Variances [L09-2]
Flight Café is a company that prepares in-flight meals for airlines in its kitchen located next to the
jocal airport. The company's planning budget for July appears below:
413
on the number of custom-
estimates that it uses for
Flight Café
Planning Budget
For the Month Ended July 31
ment
Budgeted meals (q) . ..
Revenue ($4.50q)
ner
Actual Total
18,000
for May
Expenses:
Raw materials ($2.40q)
Wages and salaries ($5,200 + $0.30g)
Utilities ($2,400+ $0.05g)
Facility rent ($4,300).
Insurance ($2,300) .
Miscellaneous ($680 + $0.10q)
$81,000
$160,000
$88,000
$19,000
$34,500
43,200
10,600
3,300
4,300
2,300
2,480
.
30 customers per
Total expense
66,180
$14,820
Net operating income
ay?
budget for May?
for May?
Cor May?
Te 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
17,800
Budgeted meals (q)
Revenue ($4.50q)
$80,100
Expenses:
Raw materials ($2.40q)
Wages and salaries ($5,200 + $0.30q)
Utilities ($2,400 + $0.05q) ....
Facility rent ($4,300)...
Insurance ($2,300) ..
Miscellaneous ($680 + $0.10q)....
42,720
10,540
3,290
4,300
2,300
2,460
ing budget
May?
May?
65,610
. $14,490
Total expense
Net operating income ....
Required:
1. Prepare a report showing the company's activity variances for July.
2.
Which of the activity variances should be of concern to management? Explain.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F85e39e9b-3b6a-4fb6-8406-b63a567ff03b%2F3e0eda18-8f19-404f-9999-cf2d252099ed%2F79o9zpg.jpeg&w=3840&q=75)
Transcribed Image Text:Flexible Budgets and Performance Analysis
EXERCISE 9-2 Prepare a Report Showing Activity Variances [L09-2]
Flight Café is a company that prepares in-flight meals for airlines in its kitchen located next to the
jocal airport. The company's planning budget for July appears below:
413
on the number of custom-
estimates that it uses for
Flight Café
Planning Budget
For the Month Ended July 31
ment
Budgeted meals (q) . ..
Revenue ($4.50q)
ner
Actual Total
18,000
for May
Expenses:
Raw materials ($2.40q)
Wages and salaries ($5,200 + $0.30g)
Utilities ($2,400+ $0.05g)
Facility rent ($4,300).
Insurance ($2,300) .
Miscellaneous ($680 + $0.10q)
$81,000
$160,000
$88,000
$19,000
$34,500
43,200
10,600
3,300
4,300
2,300
2,480
.
30 customers per
Total expense
66,180
$14,820
Net operating income
ay?
budget for May?
for May?
Cor May?
Te 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
17,800
Budgeted meals (q)
Revenue ($4.50q)
$80,100
Expenses:
Raw materials ($2.40q)
Wages and salaries ($5,200 + $0.30q)
Utilities ($2,400 + $0.05q) ....
Facility rent ($4,300)...
Insurance ($2,300) ..
Miscellaneous ($680 + $0.10q)....
42,720
10,540
3,290
4,300
2,300
2,460
ing budget
May?
May?
65,610
. $14,490
Total expense
Net operating income ....
Required:
1. Prepare a report showing the company's activity variances for July.
2.
Which of the activity variances should be of concern to management? Explain.
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