TipTop Flight School offers flying lessons at a small municipal airport. The sch

Question

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 ResultsBudget Variances 180 Lessons Revenue 185 $38,790 37,800 $990 F Expenses Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration 11,500 6,660 3,830 2,920 1,915 4,285 11.340 60U 6,480 180 U 3.420 410 U 2,800 120 U 1,990 75 F 4,380 95 F Total expense 31,110 30,410 700 U Net operating income $ 7,680 7,390 $290F

Explanation / Answer

Solution:

TipTop Flight School Flexible Budget Performance Report For the Month Ended Jult 31 Actual results Revenue and spending variance Flexible Budget Activity varaiance Lessons 185 180 185 Revenue 38,790 37,800 -990 38,850 -    60 U Expenses - 60 U Instructor wages 11,500 11,340 -160 11,655 155 F Aircraft depreciation 6,660 6,480 -180 6,660                                -   0 Fuel 3,830 3,420 -410 3,515 - 315 U Mainteanance 2,920 2,800 -120 2,860 -   60 U Ground facility expenses 1,915 1,990 75 2,000 85 F Administration 4,285 4,380 95 4,385    100 F Total expenses 31,110 30,410 -700 31,075 -   35 U Net Operating income 7,680 7,390 7,775 - 25 U

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