2. Flight Café is a company that prepares in-flight meals for airlines in its ki

Question

2.

Flight Café is a company that prepares in-flight meals for airlines in its kitchen located next to the local airport. The company’s planning budget for July appears below:

3. Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested and sold 7,500 pounds of oysters in August. The company’s flexible budget for August appears below:

4.

Vulcan Flyovers offers scenic overflights of Mount St. Helens, the volcano in Washington State that explosively erupted in 1982. Data concerning the company’s operations in July appear below:

5.

Jake’s Roof Repair has provided the following data concerning its costs:

6.

Lavage Rapide is a Canadian company that owns and operates a large automatic carwash facility near Montreal. The following table provides data concerning the company’s costs:

  

For example, electricity costs are $1,200 per month plus $0.07 per car washed. The company expected to wash 8,200 cars in August and to collect an average of $6.20 per car washed.

  

8.

The Gourmand Cooking School runs short cooking courses at its small campus. Management has identified two cost drivers that it uses in its budgeting and performance reports—the number of courses and the total number of students. For example, the school might run two courses in a month and have a total of 63 students enrolled in those two courses. Data concerning the company’s cost formulas appear below:

Flight Café is a company that prepares in-flight meals for airlines in its kitchen located next to the local airport. The company’s planning budget for July appears below:

3. Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested and sold 7,500 pounds of oysters in August. The company’s flexible budget for August appears below:

4.

Vulcan Flyovers offers scenic overflights of Mount St. Helens, the volcano in Washington State that explosively erupted in 1982. Data concerning the company’s operations in July appear below:

5.

Jake’s Roof Repair has provided the following data concerning its costs:

6.

Lavage Rapide is a Canadian company that owns and operates a large automatic carwash facility near Montreal. The following table provides data concerning the company’s costs:

Fixed Cost
per Month Cost per
Car Washed   Cleaning supplies         $ 0.50        Electricity   $ 1,200      $ 0.07        Maintenance         $ 0.20        Wages and salaries   $ 4,000      $ 0.20        Depreciation   $ 8,000              Rent   $ 2,100              Administrative expenses   $ 1,400      $ 0.02     

  

For example, electricity costs are $1,200 per month plus $0.07 per car washed. The company expected to wash 8,200 cars in August and to collect an average of $6.20 per car washed.

  

The actual operating results for August appear below.

7.

8.

Flight Café is a company that prepares in-flight meals for airlines in its kitchen located next to the local airport. The company's planning budget for July appears below: Flight Café Planning Budget For the Month Ended July 31 Budgeted meals (q) Revenue ($4.30q) 25,000 107,500 xpenses Raw materials ($1.90q) Wages and salaries ($6,400 $0.20q) Utilities ($2,200 +$0.05q) Facility rent ($3,800) Insurance ($2,500) Miscellaneous ($700 $0.10q) 47,500 11,400 3,450 3,800 2,500 3,200 Total expense 71,850 Net operating income 35,650 In July, 26,000 meals were actually served. The company's flexible budget for this level of activity appears below

Explanation / Answer

Flight cafe

Activity variances

Revenue =planning budget - flexible budget =(107500-111800) =-4300 =4300F

Raw materials =47500-49400=-1900 =1900 U

Wages and Salaries =11400 - 11600= - 200=200U

Utilities =3450-3500 =-50 =50U

Facility rent = 3800-3800=0

Insurance = 2500-2500=0

Miscellaneous expense = 3200-3300=-100=100U

Total expenses = 71850- 74100= - 2250 U

Revenue 4300 F Expenses : Raw materials 1900 U Wages and Salaries 200 U Utilities 50 U Facility rent 0 none Insurance 0 none Miscellaneous expense 100 U Total expenses 2250 U Net operating income 2050 F

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