Question

TipTop Flight School offers flying lessons at a small municipal airport. The school's owner and manager has been attempting to evaluate performance and control costs using a variance report that compares the planning budget to actual results. A recent variance report appears below: TipTop Flight School Variance Report For the Month Ended July 31 Actual Planning Results Budget 225 220 Variances Lessons $ 60,400 $ 59,400 $1,000 F Revenue Expenses : Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration Total expense Net operating income 17,800 17,600 7,650 7,480 4,340 3,740 3,650 3,450 2,470 2,530 3,960 4,040 39,870 38,840 $ 20,530 $ 20,560 200 U 170 U 600 U 200 U 60 F 80F 1,030 U $ 30 F After several months of using such variance reports, the owner has become frustrated. For example, she is quite confident that instructor wages were very tightly controlled in July, but the report shows an unfavorable variance.

Answer 1

TIP TOP Glight School Felxible budget Performance Report For the Year Ended August 31 Actula Felxible budget Fexible Activity Results Performance Budget Variance 225 225 Planning Budget Formula Lessons 220 60400 350 U 60750 1350 F 59400 225 * 270.00 Service Revenue Expenese Instructor Wages Aricraft Depreciation Fuel Maintenance Ground Facility Expenses Administration Total Expenses Operating Income 17800 7650 4340 3650 2470 3960 39870 20530 225 * 225 * 225 * 225 * 200F 0 None 515 U 135 U 80F 95 F 275 U 625 U 18000 7650 3825 3515 2550 4055 39595 21155 400 U 170 U 85 U 65U 20 U 15 U 755 U 595 F 17600 7480 3740 3450 2530 80.00 34.00 17.00 13.00 + 4.00 + 3.00 + 25 * 590 1650 3380 4040 225 38840 20560