Flight Café prepares in-flight meals for airlines in its kitchen located next to

Question

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) 26,000 Revenue ($4.40g) Expenses: $114,400 Raw materials ($1.90q) Wages and salaries ($6,300 $0.20q) Utilities ($2,000 $0.05q) Facility rent ($3,200) Insurance ($2,200) Miscellaneous ($400 $0.10g) 49,400 11,500 3,300 3,200 2,200 3,000 72,600 $ 41,800 Total expense Net operating income In July, 27,000 actually meals were served. The company's flexible budget for this level of activity appears below:

Explanation / Answer

Planning budget Flexible budget Activity variances Revenue 114400 118800 4400 F Expenses: Raw materials 49400 51300 1900 U Wages and salaries 11500 11700 200 U Utilities 3300 3350 50 U Facility rent 3200 3200 0 None Insurance 2200 2200 0 None Miscellaneous 3000 3100 100 U Total expenses 72600 74850 2250 U Net operating income 41800 43950 2150 F

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