Exercise 10-4 Prepare a Flexible Budget Performance Report [LO10-4] 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) 52 52 50 Revenue ($355.00q) $ 16,100 $ 18,460 $ 17,750 Expenses: Wages and salaries ($3,100 + $92.00q) 7,840 7,884 7,700 Fuel ($34.00q) 1,930 1,768 1,700 Airport fees ($840 + $35.00q) 2,530 2,660 2,590 Aircraft depreciation ($10.00q) 520 520 500 Office expenses ($210 + $1.00q) 430 262 260 Total expense 13,250 13,094 12,750 Net operating income $ 2,850 $ 5,366 $ 5,000 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. Complete the flexible budget performance report abstract for July.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Exercise 10-4 Prepare a Flexible Budget Performance Report [LO10-4]
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) | 52 | 52 | 50 | |||
| Revenue ($355.00q) | $ | 16,100 | $ | 18,460 | $ | 17,750 |
| Expenses: | ||||||
| Wages and salaries ($3,100 + $92.00q) | 7,840 | 7,884 | 7,700 | |||
| Fuel ($34.00q) | 1,930 | 1,768 | 1,700 | |||
| Airport fees ($840 + $35.00q) | 2,530 | 2,660 | 2,590 | |||
| Aircraft |
520 | 520 | 500 | |||
| Office expenses ($210 + $1.00q) | 430 | 262 | 260 | |||
| Total expense | 13,250 | 13,094 | 12,750 | |||
| Net operating income | $ | 2,850 | $ | 5,366 | $ | 5,000 |
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. Complete the flexible budget performance report abstract for July.
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