Question

1). 7 points Tip Top Flight School offers flying lessons at a small municipal airport. The school's owner and manager has been attempting to evaluate performance and control costs using a variance report that compares the planning budget to actual results. A recent variance report appears below: TipTop Flight School Variance Report For the Month Ended July 31 Actual Planning Results Budget Varlances Lessons .... 155 150 Revenue. $33,900 $33,000 $900 F Expenses: Instructor wages.... 9,870 9,750 120 U Alrcraft depreciation 5.890 5.700 190 U Fuel...... 2,750 2,250 500 U Maintenance .......... 2,450 2,330 120 U Ground facility expenses... 1,540 1,550 10 F Administration..... 3,320 3,390 70 F Total expense 25,820 24,970 850 U $ 8,080 Net operating Income. $ 8,030 $ 50 F

Can you please show me how to work this out?

Answer 1

		Actual	Revenue and spending variance		Flexible budget	Activity variance		Planing budget
	Lessons(q)	155			155			150
	Revenue	33900	200	U	34100	1100	F	33000
less:	Expense:
	Instructor wages	9870	205	F	10075	325	U	9750
	Air craft depreciation	5890	0		5890	190	U	5700
	Fuel	2750	425	U	2325	75	U	2250
	Maintenance	2450	60	U	2390	60	U	2330
	Ground facility expense	1540	20	F	1560	10	U	1550
	Administration	3320	75	F	3395	5	U	3390
	Total	25820	185	U	25635	665	U	24970
	Net operating income	8080	385	U	8465	555	F	8030

Flexible budget revenue = actual unit * standard revenue per unit

Flexible budget expense = Actual unit* standard cost per unit + fixed charges(if any)

Revenue and spending variance= Actual - Flexible    

Activity variance= Flexible-plan budget