Question

4. Vulcan Flyovers offers scenic overflights of Mount St. Helens, the volcano in Washington State that explosively erupted in 1982. Data concerning the company’s operations in July appear below:

Vulcan Flyovers
Operating Data
For the Month Ended July 31
	Actual Results		Flexible Budget		Planning Budget
Flights (q)		57		57		55
Revenue ($355.00q)	$	16,400	$	20,235	$	19,525
Expenses:
Wages and salaries ($3,400 + $87.00q)		8,325		8,359		8,185
Fuel ($31.00q)		1,935		1,767		1,705
Airport fees ($850 + $32.00q)		2,539		2,674		2,610
Aircraft depreciation ($11.00q)		627		627		605
Office expenses ($250 + $1.00q)		475		307		305
Total expense		13,901		13,734		13,410
Net operating income	$	2,499	$	6,501	$	6,115

The company measures its activity in terms of flights. Customers can buy individual tickets for overflights or hire an entire plane for an overflight at a discount.

Required:

1. Prepare a flexible budget performance report for July that includes revenue and spending variances and activity variances. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

Answer 1

Vulcan Flyovers Flexible Budget Performance Report For the Year Ended July 31 Actula Revenue and Fexible Results Spending Varaince Budget 57 Activity Variance Planning Budget flights 57 55 16400 3835 U 20235 710F 19525 Revenue Expenese Wages and Salaries Fuel Airport Fees aircraft Depreciation Office Expenses Total Expenses Net operating income 8325 1935 2539 | 627 34 F 168|U 135 F Onone 168 U 167 U 4002 U 83591 1767 2674 627 307 13734 6501 174 U 62|U 64 U 22 U 2U 324 U 386 F 8185 1705 2610 605 305 13410 6115 475 13901 2499