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 (g) 57 57 $16,000 $ 20,235 $ 19,525 Revenue ($355.00q) Expenses: Wages and salaries ($3,100+ $92.00g) Fuel ($32.00g) Airport fees ($870 + $33.00q) Aircraft depreciation ($11.00g) Office expenses ($230$1.00g) 8,160 1,760 2,685 605 285 14,018 13,833 13,495 $ 1,982 6,402 $6,030 8,300 1,990 2,646 627 455 8,344 1,824 2,751 627 287 Total expense Net operating income

The company measures its activity in terms of flights. Customers can but individual tickets for overflights or hire an entire plane for an overflight at a discount.

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. Input all amounts as positive values.

Answer 1

			Flexible budget performance
			Actual	Revenue & spending		Flexible	Activity variance		planning
				variance		budget			budget
Flights			57			57			55
Revenue			16,000	4,235	U	20,235	710	F	19,525
expenses
Wages and salaries			8,300	44	F	8,344	184	U	8,160
Fuel			1,990	166	U	1,824	64	U	1,760
Airport fees			2,646	105	F	2,751	66	U	2,685
Aircraft depreciation			627	0	N	627	22	U	605
office expenses			455	168	U	287	2	U	285
total expense			14,018	185	U	13,833	338	U	13,495
net operating income			1,982	4,420	U	6,402	372	F	6,030