Vulcan Flyovers offers scenic overflights of Mount St. Helens, the volcano in Wa

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:

Vulcan Flyovers
Operating Data
For the Month Ended July 31
    Actual
Results   Flexible
Budget   Planning
Budget
Flights (q)      57        57        55
Revenue ($345.00q)   $   16,200     $   19,665     $   18,975
   
Expenses:                    
Wages and salaries ($3,700 + $85.00q)      8,515        8,545        8,375
Fuel ($33.00q)      2,045        1,881        1,815
Airport fees ($880 + $33.00q)      2,621        2,761        2,695
Aircraft depreciation ($9.00q)      513        513        495
Office expenses ($230 + $1.00q)      455        287        285
   
Total expense      14,149        13,987        13,665
   
Net operating income   $   2,051     $   5,678     $   5,310
   

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.)

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.

Vulcan Flyovers Flexible Budget Performance Report For the Month Ended July 31 Revenue and Spending Variances Activity Variances Revenue Expenses: Wages and salaries Fuel Airport fees Aircraft depreciation Office expenses Total expense Net operating income

Explanation / Answer

Vulcan Flyovers

Flexible Budget Performance Report

For the Month Ended July 31

Actual
Results

Revenue and Spending Variance

Flexible
Budget

Activity Variance

Planning
Budget

A

A-B

B

B-C

C

Flights (q)

57

57

55

Revenue

$16,200

$3,465

U

$19,665

$690

F

$ 18,975

Expenses:

Wages and salaries ($3,700 + $85.00q)

$ 8,515

$     30

F

$ 8,545

$170

U

$   8,375

Fuel ($33.00q)

$ 2,045

$   164

U

$ 1,881

$ 66

U

$   1,815

Airport fees ($880 + $33.00q)

$ 2,621

$   140

F

$ 2,761

$ 66

U

$   2,695

Aircraft depreciation ($9.00q)

$     513

$     -  

None

$     513

$ 18

U

$     495

Office expenses ($230 + $1.00q)

$     455

$   168

U

$     287

$    2

U

$     285

Total expense

$14,149

$   162

U

$13,987

$322

U

$ 13,665

Net operating income

$ 2,051

$3,627

U

$ 5,678

$368

U

$   5,310

Vulcan Flyovers

Flexible Budget Performance Report

For the Month Ended July 31

Actual
Results

Revenue and Spending Variance

Flexible
Budget

Activity Variance

Planning
Budget

A

A-B

B

B-C

C

Flights (q)

57

57

55

Revenue

$16,200

$3,465

U

$19,665

$690

F

$ 18,975

Expenses:

Wages and salaries ($3,700 + $85.00q)

$ 8,515

$     30

F

$ 8,545

$170

U

$   8,375

Fuel ($33.00q)

$ 2,045

$   164

U

$ 1,881

$ 66

U

$   1,815

Airport fees ($880 + $33.00q)

$ 2,621

$   140

F

$ 2,761

$ 66

U

$   2,695

Aircraft depreciation ($9.00q)

$     513

$     -  

None

$     513

$ 18

U

$     495

Office expenses ($230 + $1.00q)

$     455

$   168

U

$     287

$    2

U

$     285

Total expense

$14,149

$   162

U

$13,987

$322

U

$ 13,665

Net operating income

$ 2,051

$3,627

U

$ 5,678

$368

U

$   5,310

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