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 b elow: TipTop Flight School Variance Report For the Month Ended July 31 Actual Planning Results Budget Variances 200 Lessons Revenue 205 $42,920 42,000 $920 F Expenses 12,980 2,800 180 U 7,400 185 U 4,000 410 U 3,050 110U 65 F 4,390 80 F Instructor wages rcraft depreciation Fuel Maintenance Ground facility expenses Administration 7,585 4,410 3,160 2,765 4,310 2,830 Total expense 35,210 34,470 740 U Net operating income $ 7,710 7,530 $180 F 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 ariance

Explanation / Answer

Tip Top Flight School Flexible Budget Performance Report For the Month ended July 31 Actual Results Revenue& Spending Variance Flexible Budget Actual Variance Planning Budget Lessons                  205                                  205                         200 Revenue            42,920               130 U                            43,050             1,050 F                   42,000 Expenses: Instructor Wages            12,980               140 F                            13,120                 320 U                   12,800 ($64 X 205) Aircraft Depreciation               7,585                  -   U                               7,585                 185 U                     7,400 $37 X 205 Fuel               4,410               310 U                               4,100                 100 U                     4,000 $20 X 205 Maintenance               3,160                 50 U                               3,110                   60 U                     3,050 $650 + $12 X 205 Ground Facility Expenses               2,765                 95 F                               2,860                   30 U                     2,830 $1,630 + $6 X 205 Administration               4,310                 85 F                               4,395                     5 U                     4,390 $4,190 + ($1 X 205) Total Expenses            35,210                 40 U                            35,170                 700 U                   34,470 Net Operating Income               7,710               170 U                               7,880                 350 F                     7,530

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.