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: points Vulcan Flyovers Operating Data For the Month Ended July 31 Actual Flexible Planning Results Budget Budget 61 59 eBook Flights (9) 61 Hint $ 16,400 $ 21,655 $ 20,945 Print References Revenue ($355.009) Expenses: Wages and salaries ($3,600 + $86.009) Fuel ($32.009) Airport fees ($830 + $34.009) Aircraft depreciation ($10.009) Office expenses ($220 + $1.009) Total expense Net operating income 8,814 8,846 8,674 2,118 1,952 1,888 2,774 2,904 2,836 610 610 590 449281 279 14,765 14,593 14,267 $ 1,635 $ 7,062 $ 6,678 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

	Actual results	Revenue and spending variances		Flexible budget	Activity variances		Planning budget
Flights	61			61			59
Revenue	16400	5255	U	21655	710	F	20945
Expenses:
Wages and salaries	8814	32	F	8846	172	U	8674
Fuel	2118	166	U	1952	64	U	1888
Airpost fees	2774	130	F	2904	68	U	2836
Aircraft depreciation	610	0	None	610	20	U	590
Office expenses	449	168	U	281	2	U	279
Total expense	14765	172	U	14593	326	U	14267
Net operating income	1635	5427	U	7062	384	F	6678