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Flight Caf prepares in-flight meals for airlines in its kitchen located next to a local airport. The companys planning budget for July appears below:
| Flight Caf |
| Planning Budget |
| For the Month Ended July 31 |
| Budgeted meals (q) | | 23,000 |
| | | |
| Revenue ($3.90q) | $ | 89,700 |
| Expenses: | | |
| Raw materials ($2.30q) | | 52,900 |
| Wages and salaries ($6,500 + $0.20q) | | 11,100 |
| Utilities ($1,900 + $0.05q) | | 3,050 |
| Facility rent ($3,800) | | 3,800 |
| Insurance ($2,200) | | 2,200 |
| Miscellaneous ($500 + $0.10q) | | 2,800 |
| Total expense | | 75,850 |
| Net operating income | $ | 13,850 |
| |
In July, 24,000 meals were actually served. The companys flexible budget for this level of activity appears below:
| Flight Caf |
| Flexible Budget |
| For the Month Ended July 31 |
| Budgeted meals (q) | | 24,000 |
| | | |
| Revenue ($3.90q) | $ | 93,600 |
| Expenses: | | |
| Raw materials ($2.30q) | | 55,200 |
| Wages and salaries ($6,500+ $0.20q) | | 11,300 |
| Utilities ($1,900 + $0.05q) | | 3,100 |
| Facility rent ($3,800) | | 3,800 |
| Insurance ($2,200) | | 2,200 |
| Miscellaneous ($500 + $0.10q) | | 2,900 |
| Total expense | | 78,500 |
| Net operating income | $ | 15,100 |
| |
Required:
1. Calculate the companys activity variances for July
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