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    Which of The Activity Variances Should Be of Concern To

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    Doreen
    The document describes Air Meals' planning and flexible budgets for December. It served 21,000 meals instead of the budgeted 20,000 meals. This led to variances in revenue and several expense categories. Management should be concerned with the raw materials and miscellaneous expense variances, as they increased due to higher production volume.

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    Which of The Activity Variances Should Be of Concern To

    Uploaded by

    Doreen
    73 views2 pages
    The document describes Air Meals' planning and flexible budgets for December. It served 21,000 meals instead of the budgeted 20,000 meals. This led to variances in revenue and several expense categories. Management should be concerned with the raw materials and miscellaneous expense variances, as they increased due to higher production volume.

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    Which of the Activity Variances Should Be of Concern To

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    The document describes Air Meals' planning and flexible budgets for December. It served 21,000 meals instead of the budgeted 20,000 meals. This led to variances in revenue and several expense categories. Management should be concerned with the raw materials and miscellaneous expense variances, as they increased due to higher production volume.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    73 views2 pages

    Which of The Activity Variances Should Be of Concern To

    Uploaded by

    Doreen
    The document describes Air Meals' planning and flexible budgets for December. It served 21,000 meals instead of the budgeted 20,000 meals. This led to variances in revenue and several expense categories. Management should be concerned with the raw materials and miscellaneous expense variances, as they increased due to higher production volume.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    Which of the activity variances should be of concern to

    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

    GET THE ANSWER>> https://solutionlly.com/downloads/which-of-the-activity-variances-should-


    be-of-concern-to

    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 ($3.80q) . . . . . . . . . . . . . . . . . . . . . . . . . . . .$76,000
    Expenses:
    Raw materials ($2.30q) . . . . . . . . . . . . . . . . . . . . . .46,000
    Wages and salaries ($6,400 Â + $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 expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $69,600
    Net operating income . . . . . . . . . . . . . . . . . . . . . . . . $ 6,400
    In December, 21,000 meals were actually served. The companys flexible budget for this level of
    activity is as follows:Â
    Air Meals
    Flexible Budget
    For the Month Ended December 31
    Budgeted meals (q) . . . . . . . . . . . . . . . . . . . . . . $21,000
    Revenue ($3.80q) . . . . . . . . . . . . . . . . . . . . . . . $79,800
    Expenses:
    Raw materials ($2.30q) . . . . . . . . . . . . . . . . . $48,300
    Wages and salaries ($6,400 Â + $0.25q) . . . . $11,650
    Utilities ($2,100 + $0.05q) . . . . . . . . . . . . . .$3,150
    Facility rent ($3,800) . . . . . . . . . . . . . . . . . . . $3,800
    Insurance ($2,600) . . . . . . . . . . . . . . . . . . . .$2,600
    Miscellaneous ($700 + $0.10q) . . . . . . . . . .$2,800

    1/2
    Total expense . . . . . . . . . . . . . . . . . . . . . . . . . . $72,300
    Net operating income . . . . . . . . . . . . . . . . . . . . $7,500
    Required:Â
    1. Prepare a report showing the company’s activity variances for December.Â
    2. Which of the activity variances should be of concern to management? Explain.

    Which of the activity variances should be of concern to

    GET THE ANSWER>> https://solutionlly.com/downloads/which-of-the-activity-variances-should-


    be-of-concern-to

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