a Screen Shot 2018-07-04 at 10.47.11 AM 20.00 points ?a Search TipTop Flight Sch

Question

a Screen Shot 2018-07-04 at 10.47.11 AM 20.00 points ?a Search TipTop 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 rosults. Arecent variance report appears below Required: 2. Complete the flexible budget performance report for the school for July. (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.) TipTop Flight School Variance Report For the Month Ended Juty 31 Actual Planning susBudet Variances TipTop Flight School Flexible Budget Performance Report For the Month Ended July 31 155 150 Lessons Revenue $33,900 S 33,000 S900 F Revenue and Spending Variances Expenses: Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses 9,B70 5,890 2,750 2,450 1,540 3,320 9,750 120 U 5,700 190 U 2,250 500 U 2,330 120 U 10 F 3,390 TO F Revenue Instructor wages Aircraft depreciationn Fuel Maintenance Ground facility expenses 1,550 Total expense 25,820 24,97 0 850 U Net operating income S 8,080 S 8,030 S 50 F After several months of using such variance reports, the owner has become frustrated. For example, she is quite confident that instructor wages were very tightly contrclled in July, but the report shows an unfavorable variance Total expense Net operating income The planning budget was developed using the following formulas, where qis the number of lessons sold: Cost Formulas $220q $65q $38q $15q S 530$12q $1,250$2q $3,240 +$1q Revenue Instructor wages Aircraft depreciation Fuel Ground facility expenses

Explanation / Answer

Workings

Tip Top Flight School Flexible Budget Performance Report For the Month Ended July 31 Revenue
And
Spending Variance Activity Variance Revenue 200 U 1100 F Expense Instructor Wages 205 F 325 U Aircraft Depreciation 0 None 190 U Fuel 425 U 75 U Maintenance 60 U 60 U Ground Facility 20 F 10 U Administration 75 F 5 U Total Expense 185 U 665 U Net Operating Income 385 U 435 U

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