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 575755 Flights (9) $ 16,200 $ 19,950 $ 19, 250 Revenue ($350.009) Expenses: Wages and salaries ($3,400 + $90.00) Fuel ($34.009) Airport fees ($860 + $30.000) Aircraft depreciation ($8.009) Office expenses ($220 + $1.009) Total expense Net operating income 8,490 8,5308 , 350 2,100 1,938 1,870 2,455 2,570 2,510 456 456 440 445 277 275 13, 946 13,771 13,445 $ 2,254 $ 6,179 $ 5,805 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

Flexible budget performance report

	Actual results	revenue and spending variance	flexible budget	Activity variance	Planning budget
Flights	57		57		55
Revenue	16200	3750 U	19950	700 F	19250
Expense
Wages and salaries	8490	40 F	8530	180 U	8350
Fuel	2100	162 U	1938	68 U	1870
Airport fees	2455	115 F	2570	60 U	2510
Aircraft depreciation	456	0 None	456	16 U	440
Office expense	445	168 U	277	2 U	275
Total expense	13946	175 U	13771	326 U	13445
Net operating income	2254	3925 U	6179	374 F	5805