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) $ 16,100 $20,300 $ 19,600 Revenue ($350.000) Expenses Wages and salaries ($3,200 + $89.00) Fuel (533.00) Airport fees (S820 + $35.009) Aircraft depreciation ($10.000) Office expenses (5210 - $1.009) Total expense Net operating income 8,324 362 8,184 2,078 1.914 1.848 2.740 2.850 2,780 580 580 560 436 14,158 13,974 13,638 $ 1,942 56,326 $5,962 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

	Actual results	Revenue and spending variances		Flexible budget	Activity variances		Planning budget
Flights	58			58			56
Revenue	16100	4200	U	20300	700	F	19600
Expenses:
Wages and salaries	8324	38	F	8362	178	U	8184
Fuel	2078	164	U	1914	66	U	1848
Airpost fees	2740	110	F	2850	70	U	2780
Aircraft depreciation	580	0	None	580	20	U	560
Office expenses	436	168	U	268	2	U	266
Total expense	14158	184	U	13974	336	U	13638
Net operating income	1942	4384	U	6326	364	F	5962