Flight Café prepares in-flight meals for airlines and its planning budget for July appears below: Flight Café Planning Budget For the Month Ended July 31 Budgeted meals (q) Revenue ($4.20q) Expenses: Raw materials ($1.80q) Wages and salaries ($6,500+ $0.20q) Utilities ($1,800+ $0.05q) Facility rent ($3,400) Insurance ($2,700) Miscellaneous ($900 + $0.10q) Total expenses Net operating income Budgeted meals (q) Revenue ($4.20g) In July, 28,000 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 Expenses: Raw materials ($1.80q) Wages and salaries ($6,500+ $0.20q) Utilities ($1,800+ $0.05q) Facility rent ($3,400) Insurance ($2,700) Miscellaneous ($900+ $0.10q) Total expenses Net operating income 27,000 $ 113,400 Required: 1. Calculate the company's activity variances for July, 48,600 11,900 3,150 3,400 2,700 3,600 73,350 $ 40,050 28,000 $ 117,600 50,400 12,100 3,200 3,400 2,700 3,700 75,500 $ 42,100
Flight Café prepares in-flight meals for airlines and its planning budget for July appears below: Flight Café Planning Budget For the Month Ended July 31 Budgeted meals (q) Revenue ($4.20q) Expenses: Raw materials ($1.80q) Wages and salaries ($6,500+ $0.20q) Utilities ($1,800+ $0.05q) Facility rent ($3,400) Insurance ($2,700) Miscellaneous ($900 + $0.10q) Total expenses Net operating income Budgeted meals (q) Revenue ($4.20g) In July, 28,000 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 Expenses: Raw materials ($1.80q) Wages and salaries ($6,500+ $0.20q) Utilities ($1,800+ $0.05q) Facility rent ($3,400) Insurance ($2,700) Miscellaneous ($900+ $0.10q) Total expenses Net operating income 27,000 $ 113,400 Required: 1. Calculate the company's activity variances for July, 48,600 11,900 3,150 3,400 2,700 3,600 73,350 $ 40,050 28,000 $ 117,600 50,400 12,100 3,200 3,400 2,700 3,700 75,500 $ 42,100
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
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Transcribed Image Text:Flight Café prepares in-flight meals for airlines and its planning budget for July appears below:
Flight Café
Planning Budget
For the Month Ended July 31
Budgeted meals (q)
Revenue ($4.20q)
Expenses:
Raw materials ($1.80q)
Wages and salaries ($6,500 + $0.20g)
Utilities ($1,800 + $0.05q)
Facility rent ($3,400)
Insurance ($2,700)
Miscellaneous ($900 + $0.10q)
Total expenses
Net operating income
In July, 28,000 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)
Revenue ($4.20g)
Expenses:
Raw materials ($1.80q)
Wages and salaries ($6,500+ $0.20q)
Utilities ($1,800 + $0.05q)
Facility rent ($3,400)
Insurance ($2,700)
Miscellaneous ($900 + $0.10q)
Total expenses
Net operating income
27,000
$ 113,400
48,600
11,900
3,150
3,400
2,700
3,600
73,350
$ 40,050
28,000
$ 117,600
50,400
12, 100
3,200
3,400
2,700
3,700
75,500
$ 42,100
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.
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