appears below: Lessons Revenue Expenses: Instructor wages TipTop Flight School Variance Report For the Month Ended July 31 Aircraft depreciation Fuel Maintenance Ground facility expenses Administration Total expenses Net operating income Actual Planning Results 185 $ 42,360 Budget 180 $41,400 Variances $ 960 F 10,960 10,800 160 U 7,400 7,200 200 U 3,620 3,060 560 U 2,690 2,530 160 U 2,130 2,170 40 F 3,720 3,840 120 F 30,520 29,600 920 U $ 11,848 $ 11,800 $ 48 F After several months of using these reports, the owner has become frustrated. For example, she is confident instructor wages were very tightly controlled in July, but the report shows an unfavorable variance. She developed the planning budget using the following formulas, where q is the number of lessons sold: Cost Formulas $230q Revenue Instructor wages $60q Aircraft depreciation $40q $17q Fuel $550 +$11q Ground facility expenses $1,450 + $4q $3,300 + $3q Maintenance Administration Required: 2. Complete the flexible budget performance report for the school for July. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (l.e., zero variance). Input all amounts as positive values.
appears below: Lessons Revenue Expenses: Instructor wages TipTop Flight School Variance Report For the Month Ended July 31 Aircraft depreciation Fuel Maintenance Ground facility expenses Administration Total expenses Net operating income Actual Planning Results 185 $ 42,360 Budget 180 $41,400 Variances $ 960 F 10,960 10,800 160 U 7,400 7,200 200 U 3,620 3,060 560 U 2,690 2,530 160 U 2,130 2,170 40 F 3,720 3,840 120 F 30,520 29,600 920 U $ 11,848 $ 11,800 $ 48 F After several months of using these reports, the owner has become frustrated. For example, she is confident instructor wages were very tightly controlled in July, but the report shows an unfavorable variance. She developed the planning budget using the following formulas, where q is the number of lessons sold: Cost Formulas $230q Revenue Instructor wages $60q Aircraft depreciation $40q $17q Fuel $550 +$11q Ground facility expenses $1,450 + $4q $3,300 + $3q Maintenance Administration Required: 2. Complete the flexible budget performance report for the school for July. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (l.e., zero variance). Input all amounts as positive values.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:appears below:
Lessons
Revenue
Expenses:
Instructor wages
TipTop Flight School
Variance Report
For the Month Ended July 31
Aircraft depreciation
Fuel
Maintenance
Ground facility expenses
Administration
Total expenses
Net operating income
Actual
Planning
Results
185
$ 42,360
Budget
180
$41,400
Variances
$ 960 F
10,960
10,800
160 U
7,400
7,200
200 U
3,620
3,060
560 U
2,690
2,530
160 U
2,130
2,170
40 F
3,720
3,840
120 F
30,520
29,600
920 U
$ 11,848
$ 11,800
$ 48 F
After several months of using these reports, the owner has become frustrated. For example, she is confident instructor wages were
very tightly controlled in July, but the report shows an unfavorable variance.
She developed the planning budget using the following formulas, where q is the number of lessons sold:
Cost Formulas
$230q
Revenue
Instructor wages
$60q
Aircraft depreciation
$40q
$17q
Fuel
$550 +$11q
Ground facility expenses
$1,450 + $4q
$3,300 + $3q
Maintenance
Administration
Required:
2. Complete the flexible budget performance report for the school for July.
Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (l.e., zero
variance). Input all amounts as positive values.
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