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:

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:

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).)

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:

Explanation / Answer

lesson 195 195 Revenue per lesson 210 Revenue 40950 40810 140 U Expenses Instructer Wages 12480 12340 140 F Aircraft Depriciation 7020 7020 0 Zero variance Fuel 3510 3830 320 U maintenance 3175 3240 65 U Ground facility Expenses 2625 2535 90 F Administration 4395 4320 75 F Total Expenses 33205 33285 80 U Net Operating Income 7745 7525 220 U

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