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 58 58 Flights (9) 56 $ 16,500 $ 20,590 $ 19,880 Revenue ($355.009) Expenses : Wages and salaries ($3,600 + $86.00) Fuel ($33.00) Airport fees ($820 + $31.00) Aircraft depreciation ($8.009) Office expenses ($240 + $1.009) Total expense Net operating income 8,556 2,078 2,498 464 466 14,062 $ 2,438 8,588 1,914 2,618 464 298 13,882 $ 6,708 8, 416 1,848 2,556 448 296 13,564 $ 6,316 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	16500	4090	U	20590	710	F	19880
Expenses:
Wages and salaries	8556	32	F	8588	172	U	8416
Fuel	2078	164	U	1914	66	U	1848
Airpost fees	2498	120	F	2618	62	U	2556
Aircraft depreciation	464	0	None	464	16	U	448
Office expenses	466	168	U	298	2	U	296
Total expense	14062	180	U	13882	318	U	13564
Net operating income	2438	4270	U	6708	392	F	6316