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:

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.

Required:

1. Prepare a flexible budget performance report for July that includes revenue and spending variances and activity variances. (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 Operating Data For the Month Ended July 31 Actual
Results Flexible
Budget Planning
Budget Flights (q) 61 61 59 Revenue ($340.00q) $ 16,300 $ 20,740 $ 20,060 Expenses: Wages and salaries ($3,700 + $92.00q) 9,268 9,312 9,128 Fuel ($33.00q) 2,177 2,013 1,947 Airport fees ($850 + $32.00q) 2,692 2,802 2,738 Aircraft depreciation ($9.00q) 549 549 531 Office expenses ($210 + $1.00q) 439 271 269 Total expense 15,125 14,947 14,613 Net operating income $ 1,175 $ 5,793 $ 5,447

Explanation / Answer

Flexible budget performance flights 61 61 59 Actual Revenue & spending Flexible Activity variance planning variance budget budget Revenue 16,300 4,440 U 20,740 680 F 20,060 expenses Wages and salaries 9,268 44 F 9,312 184 U 9,128 Fuel 2,177 164 U 2,013 66 U 1,947 Airport fees 2,692 110 F 2,802 64 U 2,738 Aircraft depreciation 549 0 N 549 18 U 531 office expenses 439 168 U 271 2 U 269 total expense 15,125 178 U 14,947 334 U 14,613 net operating income 1,175 4,618 U 5,793 346 F 5,447

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