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 ($3.909) Expenses: Raw materials ($2.289) Wages and salaries ($6,300 + $0.209) Utilities ($1,900 $0.059) Facility rent ($3,300) Insurance ($2,200) Miscellaneous ($800 +$0.109) Total expenses Net operating income 26,000 $ 101,400 57,200 11,500 3,200 3,300 2,200 3,400 80,800 $ 20,600
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
![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 (g)
Revenue ($3.98q)
Expenses:
Raw materials ($2.289)
Wages and salaries ($6,300 + $0.209)
Utilities ($1,900 + $0.059)
Facility rent ($3,300).
Insurance ($2,200)
Miscellaneous ($800 +$0.109)
Total expenses
Net operating income
26,000
$ 101,400
57,200
11,500
3,200
3,300
2,200
3,400
80,800
$ 20,600
In July, 27,000 meals were actually served. The company's flexible budget for this level of activity appears below:
Budgeted meals (q)
Revenue ($3.90q)
Expenses:
Flight Café
Flexible Budget
For the Month Ended July 31
Raw materials ($2.209)
Wages and salaries ($6,300+ $0.209)
Utilities ($1,900 +$0.059)
Facility rent ($3,300)
Insurance ($2,200)
Miscellaneous ($800 +$0.109)
Total expenses
Net operating income
Required:
1. Calculate the company's activity variances for July.
27,000
$ 105,300
59,400
11,700
3,250
3,300
2,200
3,500
83,350
$ 21,950
Note: Indicate the effect of each varlance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (l.e., zero
varlance). Input all amounts as positive values.
Revenue
Expenses:
Raw materials
Wages and salaries
Utilities
Facility rent
Insurance
Miscellaneous
Flight Café
Activity Variances
For the Month Ended July 31](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F745d812f-13af-41c4-b764-f9742f99b3cd%2Fd1b1f1b7-9a85-45f4-8813-3c26080bbaac%2Fzp5iywk_processed.png&w=3840&q=75)
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