The restaurant at the Hotel Galaxy offers two choices for breakfast: an all-you-can-eat buffet and an a la carte option, where diners can order from the menu. The buffet option has a budgeted meal price of $50. The a la carte option has a budgeted average price of $39 for a meal. The restaurant manager expects that 40 percent of its diners will order the buffet option. The buffet option has a budgeted variable cost of $30 and the a la carte option averages $23 per meal in budgeted variable cost. The manager estimates that 2,000 people will order a meal in any month. For July, the restaurant served a total of 1,800 meals, including 600 buffet options. Total revenues were $30,600 for buffet meals and $50,400 for the a la carte meals. Required: a. Compute the activity variance for the restaurant for July. b. Compute the mix and quantity variances for July.
The restaurant at the Hotel Galaxy offers two choices for breakfast: an all-you-can-eat buffet and an a la carte option, where diners can order from the menu. The buffet option has a budgeted meal price of $50. The a la carte option has a budgeted average price of $39 for a meal. The restaurant manager expects that 40 percent of its diners will order the buffet option. The buffet option has a budgeted variable cost of $30 and the a la carte option averages $23 per meal in budgeted variable cost. The manager estimates that 2,000 people will order a meal in any month. For July, the restaurant served a total of 1,800 meals, including 600 buffet options. Total revenues were $30,600 for buffet meals and $50,400 for the a la carte meals. Required: a. Compute the activity variance for the restaurant for July. b. Compute the mix and quantity variances for July.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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
Transcribed Image Text:The restaurant at the Hotel Galaxy offers two choices for breakfast: an all-you-can-eat
buffet and an a la carte option, where diners can order from the menu. The buffet
option has a budgeted meal price of $50. The a la carte option has a budgeted
average price of $39 for a meal. The restaurant manager expects that 40 percent of its
diners will order the buffet option. The buffet option has a budgeted variable cost of
$30 and the a la carte option averages $23 per meal in budgeted variable cost. The
manager estimates that 2,000 people will order a meal in any month.
For July, the restaurant served a total of 1,800 meals, including 600 buffet options.
Total revenues were $30,600 for buffet meals and $50,400 for the a la carte meals.
Required:
a. Compute the activity variance for the restaurant for July.
b. Compute the mix and quantity variances for July.
Complete this question by entering your answers in the tabs below.
Required A
Required B
Compute the activity variance for the restaurant
variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not s
July. (Do not round intermediate calcul
Activity variance
< Required A
Required B
>
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