This question is from a Managerial Accounting course. I posted it twice for a re

Question

This question is from a Managerial Accounting course. I posted it twice for a reason, so please don't just copy the other answer provided.

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 results. A recent variance report appears below: TipTop Flight School Variance Report For the Month Ended July 31 Actual Planning Results Budget Variances Lessons 155 150 Revenue Expenses: 933,900 33,000 900 F 120 U 190 U 500 U Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration 9,750 5,700 2,250 2,330 1,550 3, 390 25, 82024,970 9,870 5, 890 2,750 2,450 1,540 3,320 Total expense Net operating income 850 U $ 8,080 8,030 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 controlled in July, but the report shows an unfavorable variance The planning budget was developed using the following formulas, where q is the number of lessons sold: Cost Formulas $220g $65q $38g Revenue Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration $530 $12g $1,250 +$2g $3,240+ $1g 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 Flexible Budget Performance Report For the Month Ended July 31 Actual Results Flexible Planning ul Lessons 155 150 Revenue S 33,900 $ 33,000 enses Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration 9,750 5,700 2,250 9,870 5,890 1,540 3,320 25,820 S 8,080 3,390 24,970 $ 8,030 Total expense Net operating income

Explanation / Answer

Flexible budget performance report :

Actual results Revenue and spending variance Flexible budget Static budget variance Planning budget Lessons 155 155 150 Revenue 33900 200 U 34100 1100 F 33000 Expenses : Instructor wages 9870 205 F 10075 325 U 9750 Aircraft depreciation 5890 0 None 5890 190 U 5700 Fuel 2750 425 U 2325 75 U 2250 Maintenance 2450 60 U 2390 60 U 2330 Ground facility expenses 1540 20 F 1560 10 U 1550 Administration 3320 75 F 3395 5 U 3390 Total expense 25820 185 U 25635 665 U 24970 Net operating income 8080 385 U 8465 435 F 8030

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