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 Results 60 Flexible Planning Budget Budget 60 58 Flights (9) $ 16,300 $ 21,800 $ 20,300 Revenue ($350.089) Expenses: Wages and salaries ($3,199 + $89.289) Fuel ($32.ee) Airport fees ($830 + $33.089) Aircraft depreciation ($9.889) Office expenses ($200 + $1.00g) Total expense Net operating income 8,402 8,440 8,262 2,086 1,920 1,856 2,685 2,810 2,744 540 540 522 428 260 258 14,141 13,970 13,642 $ 2,159 $ 7,030 $ 6,658 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 Budget Actual Results Planning Budget 58 Flights 60 60 Revenue $ 16,300 $ 21,000 $ 20,300 Expenses: Wages and salaries Fuel 8,402 8,440 8,262 1.920 1.856 2,086 2,685 2.744 2,810 540 540 Airport fees Aircraft depreciation Office expenses Total expense 522 258 428 260 13,970 7,030 14,141 2,159 13,642 Net operating income $ S $ 6,658

Answer 1

Actual Results are given in the Solution Flexible budget amounts given in the Solution Planning budget Amounts are also given in the Solution Vulcan Flyovers Flexible Budget Performance Report For the Year Ended July 31 Actual Results 60 Revenue and Flexible Spending Variance Budget 60 Activity Variance Planning Budget 58 flights 20300 Revenue 16300 4700U 21000 700 F Expenses Wages and Salaries 8402 38 F 8440 178U Fuel 2086 166U 1920 64 U Airport Fees 2685 125 F 2810 66 U aircraft Depreciation 540 O none 540 18U Office Expenses 428 168U 260 2U Total Expenses 14141 171 U 13970 328 U Net operating income 2159 4871 U 7030 372 F Revenue and Spending Variance= Actual amounts - Flexible budget amounts Activity Variance = Flexible budget amounts - Master Budget Amount 8262 1856 2744 522 258 13642 6658