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The restaurant at the Hotel Galaxy offers two choices for breakfast: an all-you-can-eat buffet and an a la carte option, where diners can order from the menu. The buffet option has a budgeted meal price of $37. The a la carte option has a budgeted average price of $26 for a meal. The restaurant manager expects that 40 percent of its diners will order the buffet option. The buffet option has a budgeted variable cost of $18 and the a la carte option averages $10 per meal in budgeted variable cost. The manager estimates that 2,400 people will order a meal in any month.
For July, the restaurant served a total of 2,200 meals, including 860 buffet options. Total revenues were $32,680 for buffet meals and $38,860 for the a la carte meals.
Question a. Compute the activity variance for the restaurant for July.
Question b. Compute the mix and quantity variances for July.
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