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 Results		Flexible Budget		Planning Budget
Flights (q)		55		55		53
Revenue ($340.00q)	$	16,300	$	18,700	$	18,020
Expenses:
Wages and salaries ($3,500 + $89.00q)		8,357		8,395		8,217
Fuel ($31.00q)		1,873		1,705		1,643
Airport fees ($800 + $32.00q)		2,410		2,560		2,496
Aircraft depreciation ($10.00q)		550		550		530
Office expenses ($250 + $1.00q)		473		305		303
Total expense		13,663		13,515		13,189
Net operating income	$	2,637	$	5,185	$	4,831

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.)

Vulcan Flyovers
Flexible Budget Performance Report
For the month ended July 31
	Actual Results			Flexible Budget			Planning Budget
Flights	55			55			53
Revnue	16300			18700			18020
Expenses
Wages and Salaries	8357			8395			8217
Fuel	1873			1705			1643
Airport Fees	2410			2560			2496
Aircraft Depreciation	550			550			530
Office expenses	473			305			303
Total expense	13663			13515			13189
Net Operating income	2637			5185			4831

Answer 1

Vulcan Flyovers Flexible Budget Performance Report For the Year Ended July 31 Actula / Revenue and Fexible Results Spending Varaince Budget 55 Activity Variance Planning Budget flights 55 53 16300 2400 U 18700 01 680 F 18020 38 E Revenue Expenese Wages and Salaries Fuel Airport Fees aircraft Depreciation Office Expenses Total Expenses Net operating income 8357 1873 2410 550 473 13663 2637 168 U 150 F 0 none 168 U 148 U 2548 U 8395 178 U 1705 62 U 2560 64 U 550 20 U 305 L2U 13515 326 U 5185 354F 8217 1643 2496 530 303 13189 4831