Problem 9-21 Critique a Report; Prepare a Performance Report [LO9-1, LO9-4, LO9-

Question

Problem 9-21 Critique a Report; Prepare a Performance Report [LO9-1, LO9-4, LO9-6]

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:

  

  

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 July, 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 July. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)

SEE TABLE HERE: https://gyazo.com/b213139f7839e6b2db6d0a88340198d8

     

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:

Explanation / Answer

the flexible budget performance report for the school for July:

Flexible budget Actual Results Variance F / UF Lessons 185 185 Revenue 40700 40530 170 UF Less: Expenses: Instructor wages 11840 11680 160 F Aircraft depreciation 7400 7400 0 None Fuel 3885 4260 375 UF Maintenance 2675 2730 55 UF Ground facility expenses 2165 2070 95 F Administration 4375 4320 55 F Total Expenses 32340 32460 120 UF Net Operating Income 8360 8070 290 UF

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