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 Results		Flexible Budget		Planning Budget
Flights (q)		59		59		57
Revenue ($340.00q)	$	16,200	$	20,060	$	19,380
Expenses:
Wages and salaries ($3,200 + $92.00q)		8,584		8,628		8,444
Fuel ($31.00q)		1,997		1,829		1,767
Airport fees ($800 + $31.00q)		2,484		2,629		2,567
Aircraft depreciation ($9.00q)		531		531		513
Office expenses ($200 + $1.00q)		427		259		257
Total expense		14,023		13,876		13,548
Net operating income	$	2,177	$	6,184	$	5,832

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.)

Answer 1

Please hit LIKE button if this helped. For any further explanation, please put your query in comment, will get back to you.
Vulcan Flyovers
Operating Data
For the Month Ended July 31
	Actual		Revenue and Spending Variance		Flexible		Activity Variance		Planning
	Results		$		Budget		$		Budget
		A	A-B			B	B-C			C
Flights (q)		59	0	None		59	2	F		57
Revenue ($340.00q)	$	16,200	3,860	U	$	20,060	680	F	$	19,380
Expenses:
Wages and salaries ($3,200 + $92.00q)		8,584	44	F		8,628	184	U		8,444
Fuel ($31.00q)		1,997	168	U		1,829	62	U		1,767
Airport fees ($800 + $31.00q)		2,484	145	F		2,629	62	U		2,567
Aircraft depreciation ($9.00q)		531	0	N		531	18	U		513
Office expenses ($200 + $1.00q)		427	168	U		259	2	U		257
Total expense		14,023	147	U		13,876	328	U		13,548
Net operating income	$	2,177	4,007	U	$	6,184	352	F	$	5,832