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 Results Budget Budget 54 Flights (g) 56 56 16,200 $19,880 $19,170 Revenue ($355.00g) Expenses: Wages and salaries ($3,200+ $91.00g) Fuel ($30.00g) Airport fees ($800 $30.00q) Aircraft depreciation ($10.00g) Office expenses ($240 $1.00q) 8,114 1,620 2,420 540 294 13,498 13,312 12,988 $ 2,702 6,568 6,182 8,254 1,850 2,370 560 464 8,296 1,680 2,480 560 296 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 56 56 54 Revenue 16,200 19,880 19,170 Expenses: Wages and salaries 8,254 8,296 8,114 Fuel 1,850 1,680 1,620

Explanation / Answer

Actual Revenue and spending variances Flexible budget Activity variances Planning budget Flights 56 56 54 Revenue 16200 3680 U 19880 710 F 19170 Expenses: Wages and salaries 8254 42 F 8296 182 U 8114 Fuel 1850 170 U 1680 60 U 1620 Airport fees 2370 110 F 2480 60 U 2420 Aircraft depreciation 560 0 None 560 20 U 540 Office expenses 464 168 U 296 2 U 294 Total expense 13498 186 U 13312 324 U 12988 Net operating income 2702 3866 U 6568 386 F 6182

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