Feedback the correct answer is a learning objective 1

Info icon This preview shows pages 2–4. Sign up to view the full content.

View Full Document Right Arrow Icon
Feedback – The correct answer is A: Learning Objective 1 – Determine the total expense that would be budgeted at this level of activity as follows: Ricky’s Fiesta Diner Flexible Budget For the Month Ended January 31 Budgeted meals served (q) 1,60 0 Revenue ($12q) $19,200 Expenses: Cost of ingredients ($3.50q) 5,600 Wages ($7,500) 7,500
Image of page 2

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Utilities ($600 + $0.20q) 920 Rent ($2,500) 2,500 Total expense 16,520 Net operating income $ 2,680 4. Ricky’s Fiesta Diner is a family-owned restaurant that serves pizza and Italian dishes. Data concerning the restaurant’s monthly revenues and costs appear below (q refers to the number of meals served): Formula Revenue $12q Cost of ingredients $3.50q Wages $7,500 Utilities $600 + $0.20q Rent $2,500 Actual results for the diner for January were as follows: Actual Results Budgeted meals served 1,600 Revenue $18,80 0 Expenses: Cost of ingredients 5,200 Wages 7,200 Utilities 928 Rent 2,50 0 Total expense 15,82 8 Net operating income $ 2,972 Refer to the information set forth above and, as needed, to the information provided in the exam questions #2 and #3 set forth above. The flexible budget performance report for the diner for January would include the following: A) a total activity variance of $830 F, a revenue variance of $400 U, and a spending variance of $692 F. B) a total activity variance of $830 F, a revenue variance of $1,200 F, and a spending variance of $370 U. C) a total activity variance of $1,850 F, a revenue variance of $400 U, and a spending variance of $692 F. D) cannot be determined.
Image of page 3
Feedback – The correct answer is A: Learning Objectives 2, 3, and 4 – Determine the information that would be set forth in the flexible budget performance report as follows: (1) Planning Budget Activity Variances (2) – (1) (2) Flexible Budget Revenue and Spending Variances (3) – (2) (3) Actual Result s Budgeted meals served (q) 1,500 1,600 1,600 Revenue ($12q) $18,000 $1,200 F $19,200 $400 U $18,800 Expenses: Cost of ingredients ($3.50q) 5,250 350 U 5,600 400 F 5,200 Wages ($7,500) 7,500 0 7,500 300 F 7,200 Utilities ($600 + $0.20q) 900 20 U 920 8 U 928 Rent ($2,500) 2,500 0 2,500 0 2,500 Total expense 16,150 370 U 16,520 692 F 15,828 Net operating income $ 1,850 $ 830 F $ 2,680 $292 F $2,972
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern