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 (g) 28,000 $ 123,200 Revenue ($4.40g) Expenses: Raw materials ($1.80g) 50,400 Wages and salaries ($6,200 + $0.20g) 11,800 Utilities ($1,900+ $0.05g) 3,300 Facility rent ($3,800) 3,800 Insurance ($2,900) 2,900 Miscellaneous ($800+ $0.10g) Total expense 3,600 75,800 Net operating income $ 47,400 In July, 29,000 meals were actually served. The company's flexible budget for this level of activity appears below:
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 (g) 28,000 $ 123,200 Revenue ($4.40g) Expenses: Raw materials ($1.80g) 50,400 Wages and salaries ($6,200 + $0.20g) 11,800 Utilities ($1,900+ $0.05g) 3,300 Facility rent ($3,800) 3,800 Insurance ($2,900) 2,900 Miscellaneous ($800+ $0.10g) Total expense 3,600 75,800 Net operating income $ 47,400 In July, 29,000 meals were actually served. The company's flexible budget for this level of activity appears below:
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter9: Profit Planning And Flexible Budgets
Section: Chapter Questions
Problem 45BEB: Pilsner Inc. purchases raw materials on account for use in production. The direct materials...
Related questions
Concept explainers
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.
Question
Transcribed Image Text:Accounting
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 (g)
28,000
Revenue ($4.40g)
$ 123,200
Expenses:
Raw materials ($1.80g)
50,400
Wages and salaries ($6,200 + $0.20g)
11,800
Utilities ($1,900+ $0.05g)
3,300
Facility rent ($3,800)
3,800
Insurance ($2,900)
2,900
Miscellaneous ($800 + $0.10g)
3,600
Total expense
75,800
Net operating income
$ 47,400
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 (g)
29,000
Revenue ($4.40g)
$ 127,600
Expenses:
Raw materials ($1.80g)
52, 200
Wages and salaries ($6,200+ $0.20g)
12,000
Utilities ($1,900+ $0.05g)
3,350
Facility rent ($3,800)
3,800
Insurance ($2,900)
2,900
Miscellaneous ($800+ $0.10g)
3,700
Total expense
77,950
Net operating income
$ 49,650
Net operating income
$ 49,650
tequired:
Calculate the company's activity variances for July. (Indicate the effect of each variance by selecting "F" for favorable, "U" for
infavorable, 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
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
Excel Applications for Accounting Principles
Accounting
ISBN:
9781111581565
Author:
Gaylord N. Smith
Publisher:
Cengage Learning