BGN5eCh08Exam

# Feedback the correct answer is a learning objective 1

• Notes
• 4

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

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

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

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.
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
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### What students are saying

• 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.

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

• 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.

Dana University of Pennsylvania ‘17, Course Hero Intern

• 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.

Jill Tulane University ‘16, Course Hero Intern