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

Question

2 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 10 points Budgeted meals (g) 28,000 Revenue (4.00q) Expenses: $112,000 eBook Raw materials ($2.00g) Wages and salaries ($6,400+$0.20g) Utilities ($2,200 + $0.05q) Facility rent ($3,700) Insurance ($2,900) Miscellaneous($800 $0.10q) 56,000 12,000 3,600 3,700 2,900 3,600 81,800 30,200 Hint Print References Total expense Net operating income In July, 29,000 actually meals were 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 (g) 29,000 $116,000 Revenue ($4.00g) Expenses: Raw materials ($2.00g) Wages and salaries ($6,400+ $0.20g) Utilities ($2,200 $0.05q) Facility rent ($3,700) Insurance ($2,900) 58,000 12,200 3,650 3,700 2,900 3,700 84,150 iscellaneous ($800$0.10g) Total expense

Explanation / Answer

Answer

Planning Budget

Flexible Budget

Variance

Favorable / Unfavorable

Budgeted Meals

                    28,000

                   29,000

Revenue

                  112,000

                 116,000

         4,000

Favorable

Expenses:

Raw Material

                    56,000

                   58,000

       (2,000)

Unfavorable

Wages and Salaries

                    12,000

                   12,200

         (200)

Unfavorable

Utilities

                       3,600

                     3,650

             (50)

Unfavorable

Facility Rent

                       3,700

                     3,700

                -  

                       -  

Insurance

                       2,900

                     2,900

                -  

                       -  

Misc.

                       3,600

                     3,700

          (100)

Unfavorable

Total Expenses

                    81,800

                   84,150

       (2,350)

Unfavorable

Net Operating Income

                    30,200

                   31,850

         1,650

Favorable

Planning Budget

Flexible Budget

Variance

Favorable / Unfavorable

Budgeted Meals

                    28,000

                   29,000

Revenue

                  112,000

                 116,000

         4,000

Favorable

Expenses:

Raw Material

                    56,000

                   58,000

       (2,000)

Unfavorable

Wages and Salaries

                    12,000

                   12,200

         (200)

Unfavorable

Utilities

                       3,600

                     3,650

             (50)

Unfavorable

Facility Rent

                       3,700

                     3,700

                -  

                       -  

Insurance

                       2,900

                     2,900

                -  

                       -  

Misc.

                       3,600

                     3,700

          (100)

Unfavorable

Total Expenses

                    81,800

                   84,150

       (2,350)

Unfavorable

Net Operating Income

                    30,200

                   31,850

         1,650

Favorable

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