TipTop Flight School offers flying lessons at a small municipal airport. The sch

Question

TipTop Flight School offers flying lessons at a small municipal airport. The school's 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: TipTop Flight School Variance Report For the Month Ended July 31 Actual Planning ResultsBudget Variances 185 Lessons Revenue 180 $36,950 S 36,000 $950 F Expenses Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration 11,530 6,475 3,890 2,770 2,095 4,260 11.340 190 U 6,300 175 U 3.420 470 U 2,630 140 U 2,170 75 F 4,360 100 F Total expense 31,020 30,220 800 U Net operating income S 5,930 5,780 $150 F

Explanation / Answer

Answer:

Tip Top Flight School Flexible Budget Performance Report For the month Ended July 31 Particulars Actual Results Revenue and spending Variances Flexible budget Activity variance Planning budget Lessons 185 185 180 Revenue 36950 -50 U 37000 1000 F 36000 Expenses: Instructor Wages 11530 -125 F 11655 315 U 11340 Aircraft Depreciation 6475 0 6475 175 U 6300 Fuel 3890 375 U 3515 95 U 3420 Maintenance 2770 85 U 2685 55 U 2630 Ground facility expenses 2095 -90 F 2185 15 U 2170 Administration 4260 -105 F 4365 5 U 4360 Total expenses 31020 140 U 30880 660 U 30220 Net operating income 5930 -190 U 6120 340 F 5780

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