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 50 Flights (9) 52 $ 16,200 $ 18,720 $18,000 Revenue ($360.009) Expenses: Wages and salaries ($3,100 - $87.000) Fuel ($32.009) Airport fees ($820 + $31.009) Aircraft depreciation ($11.009) Office expenses ($220 + $1.009) Total expense Net operating income 7,590 7.624 7.450 1,830 1,664 1,600 2,292 2,432 2,370 572 572 550 440 270 12,724 12,564 12.240 3.476 55 156 $ 5.760 272 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 (.e., zero variance). Input all amounts as positive values.) Vulcan Flyovers

Answer 1

Flexible budget performance report

	Actual results	Revenue and spending variance	Flexible budget	Activity variance	Planning budget
Flights	52		52		50
Revenue	16200	2520 U	18720	720 F	18000
Expenses
Wages and salareis	7590	34 F	7624	174 U	7450
Fuel	1830	166 U	1664	64 U	1600
Airport fees	2292	140 F	2432	62 U	2370
Aircraft depreciation	572	0 None	572	22 U	550
Office expense	440	168 U	272	2 U	270
Total expense	12724	160 U	12564	324 U	12240
Net operating income	3476	2680 U	6156	396 U	5760