4 Flight Café prepares in-flight meals for airlines in its kitchen located next to a local airport. Thecompany's planning budget for July appears below:Flight CaféPlanning BudgetFor the Month Ended July 31Budgeted meals (q)Revenue ($4.209)Expenses:Raw materials ($1.909)Wages and salaries ($6,500 + $0.209)Utilities ($1,800 + $0.059)Facility rent ($3,800)Insurance ($2,100)Miscellaneous ($400 + $0.109)Total expenseNet operating incomeBudgeted meals (q)Revenue ($4.209)In July, 26,000 meals were actually served. The company's flexible budget for this level of activityappears below:Flight CaféFlexible BudgetFor the Month Ended July 31Expenses:Raw materials ($1.909)Wages and salaries ($6,500+ $0.209)Utilities ($1,800 + $0.059)Facility rent ($3,800)Insurance ($2,100)25,000$ 105,000Miscellaneous ($400 + $0.109)Total expenseNet operating income47,50011,5003,0503,8002,1002,90070,850$ 34,15026,000$ 109,20049,40011,7003,1003,8002,1003,00073,100$36,100 Required:1. Calculate the company's activity variances for July.Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and"None" for no effect (i.e., zero variance). Input all amounts as positive values.RevenueExpenses:Raw materialsWages and salariesUtilitiesFacility rentInsuranceMiscellaneousAnswer is complete but not entirely correct.Flight CaféActivity VariancesFor the Month Ended July 31$Total expenseNet operating income$4,200 F1,900U200U500 X U0F0None100U13,950 X U(9,750) ►U

ACTIVITY VARIANCEActivity variance is the comparative analysis tool which helps to determine the variance or the difference between the values of both the revenue and costs of the planned budget with that of the flexible budget. It shows the variance between the two levels of activity or the different levels of production.Flight CafeActivity Variance For the Month Ended July 31Planning BudgetFlexible BudgetActivity VariancesRevenue$109,200$105,000$4,200UExpenses : Raw Materials$49,400$47,500$1,900F Wages And Salaries$11,700$11,500$200F Utilities $3,100$3,050$50F Facility Rent$3,800$3,800$0None Insurance$2,100$2,100$0None Miscellaneous$3,000$2,900$100FTotal Expense$73,100$70,850$2,550FNet Operating Income$36,100$34,150$1,950UREQUIREMENT # :— FINAL ANSWERRequirement #1 :— Flight CafeActivity Variance For the Month Ended July 31Activity VariancesRevenue$4,200UExpenses : Raw Materials$1,900F Wages And Salaries$200F Utilities $50F Facility Rent$0None Insurance$0None Miscellaneous$100FTotal Expense$2,550FNet Operating Income$1,950U

Business

Accounting

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. Revenue Expenses: Raw materials Wages and salaries Utilities Facility rent Insurance Miscellaneous Answer is complete but not entirely correct. Flight Café Activity Variances For the Month Ended July 31 $ Total expense Net operating income $ 4,200 F 1,900 U 200 U 500 X U 0 F 0 None 100 U 13,950 X U (9,750) ► U

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. Revenue Expenses: Raw materials Wages and salaries Utilities Facility rent Insurance Miscellaneous Answer is complete but not entirely correct. Flight Café Activity Variances For the Month Ended July 31 $ Total expense Net operating income $ 4,200 F 1,900 U 200 U 500 X U 0 F 0 None 100 U 13,950 X U (9,750) ► U

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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