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 Tetual Flexible Planning Results Budget Budget 58 Flights (9) $ 16,100 $ 20,010 $ 19,320 Revenue ($345.00g) Expenses: Wages and salaries ($3,300 + $85.00) Fuel ($31.009) Airport fees ($800 + $34.009) Aircraft depreciation ($10.009) Office expenses ($210 + $1.009) Total expense Net operating income 8,200 1,966 2,642 580 436 13,824 2,276 B.230 8.060 1,798 1,736 2,772 2,704 580 560 268 266 13,648 13,326 6,362 $ 5,994 $ $ 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.) Vulcan Flyovers Flexible Budget Performance Report For the Month Ended July 31 Flexible Actual Results Planning Budget Budget Flights 58 $ 16,100 20,010 19,320 Revenue Expenses: Wages and salaries 8,060 1,736 Fuel Airport fees 8,2001 1,966 2,642 580 4361 2,704 Aircraft depreciation 8,230 1,798 2,772 580 2687 13,648 6,362 Office expenses 560 266 13,326 5,994 Total expense Net operating income $ 2,276 $ $

Answer 1

Flexible budget performance report

	Actual results	Revenue and spending variance	Flexible budget	Activity variance	Planning budget
Flights	58		58		56
Revenue	16100	3910 U	20010	690 F	19320
Expenses
wages and salaries	8200	30 F	8230	170 U	8060
Fuel	1966	168 U	1798	62 U	1736
Airport fees	2642	130 F	2772	68 U	2704
Aircraft depreciation	580	0 None	580	20 U	560
Office expense	436	168 U	268	2 U	266
Total expense	13824	176 U	13648	322 U	13326
Net operating income	2276	4086 U	6362	368 F	5994