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 3.1 Actual Flexible Planning Results Budget Budget 53 Flights (g) $ 16,300 $ 19,250 18,550 Revenue ($350.00g) Expenses: Wages and salaries ($3,600 + $90.00q) Fuel ($34.00q) Airport fees ($850 $33.00g) Aircraft depreciation ($10.00g) Office expenses ($230+ $1.00g) 8,370 1,802 2,599 530 283 14,070 13,920 13,584 $ 2,230 $ 5,330 4,966 8,510 2,032 2,525 550 453 8,550 1,870 2,665 550 285 Total expense Net operating income 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
			Actual	Revenue & spending		Flexible	Activity variance		planning
				variance		budget			budget
Flights			55			55			53
Revenue			16,300	2,950	U	19,250	700	F	18,550
expenses
Wages and salaries			8,510	40	F	8,550	180	U	8,370
Fuel			2,032	162	U	1,870	68	U	1,802
Airport fees			2,525	140	F	2,665	66	U	2,599
Aircraft depreciation			550	0	N	550	20	U	530
office expenses			453	168	U	285	2	U	283
total expense			14,070	150	U	13,920	336	U	13,584
net operating income			2,230	3,100	U	5,330	364	F	4,966