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 ($4.509) Expenses: Raw materials ($1.909) Wages and salaries ($6,200 + $0.209) Utilities ($1,800 + $0.059) Facility rent ($3,200) Insurance ($2,900) Miscellaneous ($800 + $0.109) Total expense Net operating income Budgeted meals (q) Revenue ($4.50q) In July, 26,000 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 Expenses: Raw materials ($1.909) Wages and salaries ($6,200+ $0.209) Utilities ($1,800 + $0.059) 25,000 $ 112,500 Facility rent ($3,200) Insurance ($2,900) Miscellaneous ($800 + $0.109) Total expense Net operating income 47,500 11, 200 3,050 3,200 2,900 3,300 71,150 $ 41,350 26,000 $ 117,000 49,400 11,400 3,100 3,200 2,900 3,400 73,400 $ 43,600 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
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 ($4.509) Expenses: Raw materials ($1.909) Wages and salaries ($6,200 + $0.209) Utilities ($1,800 + $0.059) Facility rent ($3,200) Insurance ($2,900) Miscellaneous ($800 + $0.109) Total expense Net operating income Budgeted meals (q) Revenue ($4.50q) In July, 26,000 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 Expenses: Raw materials ($1.909) Wages and salaries ($6,200+ $0.209) Utilities ($1,800 + $0.059) 25,000 $ 112,500 Facility rent ($3,200) Insurance ($2,900) Miscellaneous ($800 + $0.109) Total expense Net operating income 47,500 11, 200 3,050 3,200 2,900 3,300 71,150 $ 41,350 26,000 $ 117,000 49,400 11,400 3,100 3,200 2,900 3,400 73,400 $ 43,600 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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
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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.
Question
20
Transcribed Image Text:Revenue
Expenses:
Raw materials
Wages and salaries
Utilities
Facility rent
Insurance
Miscellaneous
Total expense
Net operating income
Flight Café
Activity Variances
For the Month Ended July 31
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 ($4.509)
Expenses:
Raw materials ($1.909)
Wages and salaries ($6,200 + $0.209)
Utilities ($1,800 + $0.059)
Facility rent ($3,200)
Insurance ($2,900)
Budgeted meals (q)
Revenue ($4.509)
Miscellaneous ($800 + $0.109)
Total expense
Net operating income
In July, 26,000 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
Expenses:
Raw materials ($1.909)
Wages and salaries ($6,200+ $0.209)
Utilities ($1,800 + $0.059)
25,000
$ 112,500
Facility rent ($3,200)
Insurance ($2,900)
Miscellaneous ($800 + $0.109)
Total expense
Net operating income
47,500
11, 200
3,050
3,200
2,900
3,300
71,150
$ 41,350
26,000
$ 117,000
49,400
11,400
3,100
3,200
2,900
3,400
73,400
$ 43,600
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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