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 58 58 Flights (9) 56 $ 16,400 $ 20,010 $ 19,320 Revenue ($345.009) Expenses : Wages and salaries ($3,300 + $85.00) Fuel ($31.009) Airport fees ($840 + $34.00) Aircraft depreciation ($9.009) Office expenses ($200 + $1.009) Total expense Net operating income 8,200 8,230 1,966 1,798 2,677 2,812 522 522 426 258 13,791 13,620 $ 2,609 $ 6,390 8,060 1,736 2,744 504 256 13,300 $ 6,020 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

Vulcan Flyovers Flexible Budget Performance Report For the Month Ended July 31 Flexible Actual Revenue and Planning Activity Variance Spending Variance Results Budget Budget Flights (q) 58 58 56 Revenue ($345.00*q) Expenses: Wages and salaries ($3,300 $85.00*q) Fuel ($31.00 q Airport fees ($840 $34.00*q) Aircraft depreciation ($9.00*q) Office expenses ($200 $1.00*q) Total Expenses Net Operating Income 16400 3610 690 20010 F 19320 8200 30 F 8230 170 8060 1966 168 U 1798 62 1736 68 2744 18 522 0 None 522 504 426 256 168 258 2. 171 320 13791 U 13620 13300 2609 3781 U 6390 370 F 6020