Prepare a Report Showing Activity Variances (L0 – 10-2)

Published on November 2017 | Categories: Technology | Downloads: 103 | Comments: 0 | Views: 493
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Prepare a Report Showing Activity Variances (L0 – 10-2) Air Meals 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 December appears below: Air Meals Planning Budget For the Month Ended December 31 Budgeted meals (q) …………………………………………………….. 20,000 Revenue ($3.80 q) ………………………………………………………. $76,000 Expenses: Raw Materials (2.30q) ……………………………………………….. 46,000 Wages and Salaries ($6,400 + $0.25q) ……………………….. 11,400 Utilities (2,100 + $0.05q) ……………………………………………. 3,100 Facility Rent ($3,800) …………………………………………………. 3,800 Insurance ($2,600) ……………………………………………………… 2,600 Miscellaneous ($700 + $0.10q) …………………………………… 2,700 Total expenses ………………………………………………………………. 69,600 Net operating income ……………………………………………………. $ 6,400 In December, 21,000 meals were actually served. The company’s flexible budget for this level of activity follows: Air Meals Flexible Budget For the Month Ended December 31 Budgeted meals (q) …………………………………………………….. 21,000 Revenue ($3.80 q) ………………………………………………………. $79,800 Expenses: Raw Materials (2.30q) ……………………………………………….. 48,300 Wages and Salaries ($6,400 + $0.25q) ……………………….. 11,650 Utilities ($2,100 + $0.50q) …………………………………………. 3,150 Facility Rent ($3,800) ………………………………………………… 3,800 Insurance ($2,600) ……………………………………………………… 2,600 Miscellaneous ($700 + $0.10q) …………………………………… 2,800 Total expenses ………………………………………………………………. 72,300 Net operating income ……………………………………………………. $ 7,500

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Prepare a Report Showing Activity Variances (L0 – 10-2) Air Meals 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 December appears below: Air Meals Planning Budget For the Month Ended December 31 Budgeted meals (q) …………………………………………………….. 20,000 Revenue ($3.80 q) ………………………………………………………. $76,000 Expenses: Raw Materials (2.30q) ……………………………………………….. 46,000 Wages and Salaries ($6,400 + $0.25q) ……………………….. 11,400 Utilities (2,100 + $0.05q) ……………………………………………. 3,100 Facility Rent ($3,800) …………………………………………………. 3,800 Insurance ($2,600) ……………………………………………………… 2,600 Miscellaneous ($700 + $0.10q) …………………………………… 2,700 Total expenses ………………………………………………………………. 69,600 Net operating income ……………………………………………………. $ 6,400 In December, 21,000 meals were actually served. The company’s flexible budget for this level of activity follows: Air Meals Flexible Budget For the Month Ended December 31 Budgeted meals (q) …………………………………………………….. 21,000 Revenue ($3.80 q) ………………………………………………………. $79,800 Expenses: Raw Materials (2.30q) ……………………………………………….. 48,300 Wages and Salaries ($6,400 + $0.25q) ……………………….. 11,650 Utilities ($2,100 + $0.50q) …………………………………………. 3,150 Facility Rent ($3,800) ………………………………………………… 3,800 Insurance ($2,600) ……………………………………………………… 2,600 Miscellaneous ($700 + $0.10q) …………………………………… 2,800 Total expenses ………………………………………………………………. 72,300 Net operating income ……………………………………………………. $ 7,500

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