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: Vulcan Flyovers Operating Data For the Month Ended July 31 Actual Flexible Planning ResultsBudget Budget 56 Flights (q) 58 58 20,010 Revenue ($345.00q) Expenses: 16,200 19,320 Wages and salaries ($3,200 + $91.00q) Fuel ($33.004) Airport fees ($810 $33.00q) Aircraft depreciation ($9.00q) Office expenses ($240 $1.00q) 8,296 1,848 2,658 504 296 13,602 $ 2,109 $ 6,074 $ 5,718 8,436 2,078 2,589 522 466 14,091 8,478 1,914 2,724 522 298 13,936 Total expense Net operating income 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 Flexible Budget Performance Report For the Month Ended July 31 Flexible Budget Planning Budget Actual Results Flights Revenue $16,200 $20,010 19,320 Expenses Wages and salaries 8,436 2,078 2,589 522 466 14,091 2,109 8,478 1.914 2,724 522 298 13,936 6,074 8,296 1848 2,658 504 296 13,602 Fuel Airport fees ircraft depreciation Office expenses Total expense Net operating income

Explanation / Answer

Ans. Vulcan Flyovers Flexible Budget Performance Report For the Month Ended July31 Actual Results Revenue & Spending Variance Flexible budget Activity Variance Planning budget Flights 58 58 56 Revenue 16200 3810 U 20010 690 F 19320 Expenses: Wages and salaries 8436 42 F 8478 182 U 8296 Fuel 2078 164 U 1914 66 U 1848 Airport fees 2589 135 F 2724 66 U 2658 Aircraft depreciation 522 0 N 522 18 U 504 Office expenses 466 168 U 298 2 U 296 Total expenses 14091 155 U 13936 334 U 13602 Net operating income 2109 3965 U 6074 356 F 5718 *Revenue & Spending variance = Actual results - Flexible budget *Activity variance = Flexible budget - Planning Budget *Increase in Revenue & Net opearting income from flexible to actual and planning to flexible = Favorable. *Decrease in Revenue & Net opearting income from flexible to actual and planning to flexible = Unfavorable. *increase in Expenses from Planning to flexible and flexible to actual    = Unfavorable. *Decrease in Expenses from Planning to flexible and flexible to actual    = Favorable.

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