Question

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 Flexible Planning Results Budget Budget Flights (9) 60 60 58 Revenue ($355.000) $ 16,300 $ 21,300 20,590 8,702 8,7408,562 Expenses: Wages and salaries ($3,400+ $89.000) Fuel ($34.000 Airport fees ($870 + $34.00) Aircraft depreciation ($8.00m) Office expenses ($210 + $1.000) 2,040 1,972 2,805 480 438 2,910 480 270 2,842 464 2 68 Total expense 14,627 14,440 14,108 Net operating income $ 1,673 $ 6,860 $6,482 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.

Answer 1

Flexible budget performance report

	Revenue and spending variance	Activity variance
Revenue	16300-21300 = 5000 U	21300-20590 = 710 F
Expenses
Wages and salaries	8702-8740 = 38 F	8740-8562 = 178 U
Fuel	2202-2040 = 162 U	2040-1972 = 68 U
Airport fees	2805-2910 = 105 F	2910-2842 = 68 U
Aircraft depreciation	0 None	480-464 = 16 U
Office expenses	438-270 = 168 U	2 U
Total expense	187 U	332 U
Net operating income	5187 U	378 F