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:

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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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) 28,000
Revenue ($4.00q) $ 112,000
Expenses:  
Raw materials ($2.20q) 61,600
Wages and salaries ($6,400 + $0.20q) 12,000
Utilities ($1,900 + $0.05q) 3,300
Facility rent ($3,500) 3,500
Insurance ($2,200) 2,200
Miscellaneous ($400 + $0.10q) 3,200
Total expense 85,800
Net operating income $ 26,200

 

In July, 29,000 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) 29,000
Revenue ($4.00q) $ 116,000
Expenses:  
Raw materials ($2.20q) 63,800
Wages and salaries ($6,400+ $0.20q) 12,200
Utilities ($1,900 + $0.05q) 3,350
Facility rent ($3,500) 3,500
Insurance ($2,200) 2,200
Miscellaneous ($400 + $0.10q) 3,300
Total expense 88,350
Net operating income $ 27,650

 

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**

**Activity Variances**

*For the Month Ended July 31*

| **Revenue**                            |        |        |
|----------------------------------------|--------|--------|
|                                         |        |        |
| **Expenses:**                           |        |        |
| Raw materials                           |        |        |
| Wages and salaries                      |        |        |
| Utilities                               |        |        |
| Facility rent                           |        |        |
| Insurance                               |        |        |
| Miscellaneous                           |        |        |
| **Total expense**                       |        |        |
| **Net operating income**                |        |        |

This table outlines the activity variances for Flight Café for the month ending on July 31. It categorizes financial information into two primary sections: revenue and expenses. Expenses are further broken down into categories such as raw materials, wages and salaries, utilities, facility rent, insurance, and miscellaneous. The total expense is calculated, and finally, the net operating income is determined by subtracting total expenses from revenue. Each category has allocated columns for financial values, but the specific amounts are not provided in this template.
Transcribed Image Text:**Flight Café** **Activity Variances** *For the Month Ended July 31* | **Revenue** | | | |----------------------------------------|--------|--------| | | | | | **Expenses:** | | | | Raw materials | | | | Wages and salaries | | | | Utilities | | | | Facility rent | | | | Insurance | | | | Miscellaneous | | | | **Total expense** | | | | **Net operating income** | | | This table outlines the activity variances for Flight Café for the month ending on July 31. It categorizes financial information into two primary sections: revenue and expenses. Expenses are further broken down into categories such as raw materials, wages and salaries, utilities, facility rent, insurance, and miscellaneous. The total expense is calculated, and finally, the net operating income is determined by subtracting total expenses from revenue. Each category has allocated columns for financial values, but the specific amounts are not provided in this template.
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