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) Revenue ($4.10q) Expenses: Raw materials ($2.10 q) Expenses: Raw materials ($2.10 q) 46,200 Wages and salaries ($6,200 + $0.20g) 10,600 Utilities ($2,100 + $0.05 g) 3,200 Facility rent ($3,600) 3,600 Insurance ($2,700) 2,700 Miscellaneous ($400 + $0.10q) 2,600 Total expense 68,900 Net operating income $ 21,300 In July, 23,000 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 ($4.10 q) 22,000 Facility rent ($3,600) Insurance ($2,700) Miscellaneous ($400 + $0.10q) Total expense $ 90,200 Net operating income 23,000 48,300 Wages and salaries ($6,200+ $0.20g) 10,800 Utilities ($2,100 + $0.05q) 3,250 3,600 2,700 $ 94,300 2,700 71,350 $ 22,950 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.)
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) Revenue ($4.10q) Expenses: Raw materials ($2.10 q) Expenses: Raw materials ($2.10 q) 46,200 Wages and salaries ($6,200 + $0.20g) 10,600 Utilities ($2,100 + $0.05 g) 3,200 Facility rent ($3,600) 3,600 Insurance ($2,700) 2,700 Miscellaneous ($400 + $0.10q) 2,600 Total expense 68,900 Net operating income $ 21,300 In July, 23,000 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 ($4.10 q) 22,000 Facility rent ($3,600) Insurance ($2,700) Miscellaneous ($400 + $0.10q) Total expense $ 90,200 Net operating income 23,000 48,300 Wages and salaries ($6,200+ $0.20g) 10,800 Utilities ($2,100 + $0.05q) 3,250 3,600 2,700 $ 94,300 2,700 71,350 $ 22,950 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.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
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Transcribed Image Text: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)
Revenue ($4.10q)
22,000
$ 90,200
Expenses:
Raw materials ($2.10 q)
46,200
Wages and salaries ($6,200 + $0.20g) 10,600
Utilities ($2,100 + $0.05q)
3,200
Facility rent ($3,600)
3,600
Insurance ($2,700)
2,700
Miscellaneous ($400 + $0.10q)
2,600
Total expense
68,900
Net operating income
$ 21,300
In July, 23,000 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 ($4.10 q)
Net operating income
23,000
$ 94,300
Expenses:
Raw materials ($2.10 q)
48,300
Wages and salaries ($6,200+ $0.20g) 10,800
Utilities ($2,100 + $0.05 g)
3,250
Facility rent ($3,600)
3,600
Insurance ($2,700)
2,700
Miscellaneous ($400 + $0.10q)
2,700
Total expense
71,350
$ 22,950
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.)
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