Wings Flight School offers flying lessons at a small municipal airport. The scho
ID: 2374142 • Letter: W
Question
Wings Flight School offers flying lessons at a small municipal airport. The school%u2019s 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 August, 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 August. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)
Wings Flight SchoolVariance Report
For the Month Ended August 31 Planning
Budget Actual
Results Variances Lessons 200 210 Revenue $ 45,000 $ 47,300 $ 2,300 F Expenses: Instructor wages 12,400 12,910 510 U Aircraft depreciation 11,400 11,970 570 U Fuel 4,200 5,150 950 U Maintenance 3,270 3,470 200 U Ground facility expenses 2,440 2,350 90 F Administration 4,410 4,340 70 F Total expense 38,120 40,190 2,070 U Net operating income $ 6,880 $ 7,110 $ 230 F
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