E9-4 - Please explain how you arrived at your answers. Thank you! Exercise 9-4 P

Question

E9-4 - Please explain how you arrived at your answers. Thank you!

Exercise 9-4 Prepare a Flexible Budget Performance Report [LO4]

Mt. Hood Air offers scenic overflights of Mt. Hood and the Columbia River gorge. Data concerning the company’s operations in August 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 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.)

Exercise 9-4 Prepare a Flexible Budget Performance Report [LO4]

Mt. Hood Air offers scenic overflights of Mt. Hood and the Columbia River gorge. Data concerning the company’s operations in August appear below:

Mt. Hood Air
Operating Data
For the Month Ended August 31 Planning
Budget Flexible
Budget Actual
Results   Flights (q) 53     55     55       Revenue ($360q) $ 19,080     $ 19,800     $ 16,300       Expenses:        Wages and salaries ($3,500 + $90q) 8,270   8,450     8,410            Fuel ($33q) 1,749   1,815     1,979            Airport fees ($820 + $31q) 2,463     2,525     2,525            Aircraft depreciation ($10q) 530     550     550            Office expenses ($230 + $1q) 283     285     453       Total expense 13,295   13,625     13,917       Net operating income $ 5,785   $ 6,175     $ 2,383    

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.

Complete the flexible budget performance report abstract 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.)

Mt. Hood Air
Flexible Budget Performance Report Abstract
For the Month Ended August 31 Activity Variances Revenue and Spending Variances   Revenue $   (Click to select)NoneUF $   (Click to select)NoneUF   Expenses:      Wages and salaries   (Click to select)UNoneF   (Click to select)FNoneU      Fuel   (Click to select)FUNone   (Click to select)NoneFU      Airport fees   (Click to select)UFNone   (Click to select)UFNone      Aircraft depreciation   (Click to select)FUNone   (Click to select)UFNone      Office expenses   (Click to select)FNoneU   (Click to select)UFNone   Total expense   (Click to select)NoneFU   (Click to select)FNoneU   Net operating income $   (Click to select)UFNone $   (Click to select)UNoneF

Explanation / Answer

Actual Revenue& spending Flexible Activity variance Planning Budget Revenue 16,300 3500(U) 19,800 720(F) 19,080 Expenses: Wages & salaries 8,410 40(F) 8,450 180(U0 8,270 Fuel 1,970 164(U0 1,815 66(U) 1,749 Airport 2,525 - 2,525 62(U) 2,463 Aircraft    550 -- 550 20(U)    530 office expense 453 168(U) 285 2(U) 283 total expense 13,917 292(U) 13,625 330(U) 13,295 net operating income 2,383 3,792(U) 6,175 390(F) 5,785

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