Exercise 9-2 (Algo) Activity Variances (LO9-2)Flight Café prepares in-flight meals for airlines in its kitchen located next to a local airport. The company's planning budget for Julyappears belowFlight CafePlanning BudgetFor the Honth Ended July 31Budgeted meals (4)Revenue ($4.40)Expenses:Raw materials ($2.00g)Wages and salaries ($6, 300 + $0. 209)Utilities ($1,800 + 50.05q)Facility rent ($3,600)Insurance ($2,800)Miscellaneous ($300 + $0.10)Total expense27,000$ 118,80054,00011,7003,1503,6002,8003,00078,250$ 40,550Net operating inconeIn July, 28,000 meals were actually served. The company's flexible budget for this level of activity appears below:Flight CaféFlexible BudgetFor the Honth Ended July 31Budgeted meals (4)Revenue (S4.4eg)Expenses:Raw materials ($2.00g)Mages and salaries ($6, 30e+ $0.209)Utilities ($1,800 + $0.05)Facility rent ($3,600)Insurance ($2,000)Miscellaneous (5300 + $0.10g)Total expense28,000$ 123, 20056,00011,9003,2003,6002,8003,10080,600Net operating incone$ 42,600Required:1. Calculate the company's activity variances for July. (Indicate the effect of each varience by selecting "F" for favorable, "U" forunfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.) Flight CaféActivity VariancesFor the Month Ended July 31RevenueExpenses:Raw materialsWages and salariesUtilitiesFacility rentInsuranceMiscellaneousTotal expenseNet operating income

Solution: To compute activity variance, flexible budget amounts are compared with master budget…

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 Cafe Planning Budget For the Honth Ended July 31 27,000 $ 118, 800 Budgeted seals (4) Revenue ($4.40) Expenses: Raw materials ($2.00g) Wages and salaries (56,300 + S0. 20g) utilities ($1,800 + s0.05) Facility rent ($3,600) Insurance ($2,s00) Miscellaneous ($300 . s0.10g) Total expense 54,000 11,700 3,150 3,600 2,800 3,000 78,250 $ 40,550 Net operating incone In July, 28,000 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 Cafe Planning Budget For the Honth Ended July 31 27,000 $ 118, 800 Budgeted seals (4) Revenue ($4.40) Expenses: Raw materials ($2.00g) Wages and salaries (56,300 + S0. 20g) utilities ($1,800 + s0.05) Facility rent ($3,600) Insurance ($2,s00) Miscellaneous ($300 . s0.10g) Total expense 54,000 11,700 3,150 3,600 2,800 3,000 78,250 $ 40,550 Net operating incone In July, 28,000 meals were actually served. The company's flexible budget for this level of activity appears below:

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter23: Evaluating Variances From Standard Costs

Section: Chapter Questions

Problem 4PB: Factory overhead cost variance report Feeling Better Medical Inc., a manufacturer of disposable...

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