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) 50 48 48 Revenue ($320.00) $ 13,650 $ 15,360 $ 16,000 Expenses : Wages and salaries ($4,000 + $82.009) 8,430 7,936 8,100 Fuel ($23.009) 1,260 1,104 1,150 Airport fees ($650 + $38.009) 2,350 2,474 2,550 Aircraft depreciation ($7.00) 336 336 350 Office expenses ($190 + $2.00) 460 286 290 Total expense 12,836 12,136 12,440 Net operating income $ 814 $ 3,224 $ 3,560 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 Flexible Budget Performance Report For the Month Ended July 31 Actual Flexible Results Budget 481 Planning Budget Flights 48 50 $ 13,650 $ 15,360 $ 16,000 Revenue Expenses: Wages and salaries Fuel Airport fees Aircraft depreciation Office expenses Total expense Net operating income 8,430 1,2601 2,350 336 460 12,836 $ 814 7,936 1,104 2,474 336 2861 12,136 3,224 8,100 1,150 2,550 350 290 12,440 3,560 1 $ $

Answer 1

Flexible budget performance report

	Actual results	Revenue and spending variance	Flexible budget	activity variance	Planning budget
Flights	48		48		50
Revenue	13650	1710 U	15360	640 U	16000
Expenses
Wages and salaries	8430	494 U	7936	164 F	8100
Fuel	1260	156 U	1104	46 F	1150
Airport fees	2350	124 F	2474	76 F	2550
Aircraft depreciation	336	0 None	336	14 F	350
Office expenses	460	174 U	286	4 F	290
Total expense	12836	700 U	12136	304 F	12440
Net operating income	814	2410 U	3224	336 U	3560