Vulcan Flyovers offers scenic overflights of Mount St. Helens, the volcano in Wa
ID: 2467922 • Letter: V
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:
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.
Complete the flexible budget performance report abstract 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.)
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:
Explanation / Answer
Solution:
Vulcan Flyovers
Operating Data
For the Month Ended July 31
Actual Results
Flexible Budget
Planning Budget
Variance between Flexible Budget v/s Actual Result
Variance
Favorable / Unfavorable
Flights (q)
59
59
57
Revenue ($355.00q)
$16,500
$20,945
$20,235
$4,445
Unfavorable
Expenses:
Wages and salaries ($3,600 + $87.00q)
$8,699
$8,733
$8,559
$34
Favorable
Fuel ($32.00q)
$2,054
$1,888
$1,824
$166
Unfavorable
Airport fees ($890 + $33.00q)
$2,702
$2,837
$2,771
$135
Favorable
Aircraft depreciation ($9.00q)
$531
$531
$513
$0
None
Office expenses ($210 + $1.00q)
$437
$269
$267
$168
Unfavorable
Total expense
$14,423
$14,258
$13,934
$165
Unfavorable
Net operating income
$2,077
$6,687
$6,301
$4,610
Unfavorable
Vulcan Flyovers
Operating Data
For the Month Ended July 31
Actual Results
Flexible Budget
Planning Budget
Variance between Flexible Budget v/s Actual Result
Variance
Favorable / Unfavorable
Flights (q)
59
59
57
Revenue ($355.00q)
$16,500
$20,945
$20,235
$4,445
Unfavorable
Expenses:
Wages and salaries ($3,600 + $87.00q)
$8,699
$8,733
$8,559
$34
Favorable
Fuel ($32.00q)
$2,054
$1,888
$1,824
$166
Unfavorable
Airport fees ($890 + $33.00q)
$2,702
$2,837
$2,771
$135
Favorable
Aircraft depreciation ($9.00q)
$531
$531
$513
$0
None
Office expenses ($210 + $1.00q)
$437
$269
$267
$168
Unfavorable
Total expense
$14,423
$14,258
$13,934
$165
Unfavorable
Net operating income
$2,077
$6,687
$6,301
$4,610
Unfavorable
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