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 below: Lessons Revenue Expenses: TipTop Flight School Variance Report For the Month Ended July 31 Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration Total expense Net operating income Revenue Instructor wages Aircraft depreciation Fuel Actual Planning Results Budget Variances 145 140 Maintenance Ground facility expenses Administration $ 33,110 $32,200 $910 F 8,510 4,350 2,470 8,400 4,200 1,960 2,010 1,900 1,465 1,480 3,265 3,340 75 F 22,070 21,280 790 U $ 11,040 $ 10,920 $ 120 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 variance. The planning budget was developed using the following formulas, where q is the number of lessons sold: 110 U 150 U 510 U 110 U 15 F Cost Formulas $230q $60q $30q $14q $500+ $10q $1,200 + $2q $3,200+ $1q

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 below: Lessons Revenue Expenses: TipTop Flight School Variance Report For the Month Ended July 31 Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration Total expense Net operating income Revenue Instructor wages Aircraft depreciation Fuel Actual Planning Results Budget Variances 145 140 Maintenance Ground facility expenses Administration $ 33,110 $32,200 $910 F 8,510 4,350 2,470 8,400 4,200 1,960 2,010 1,900 1,465 1,480 3,265 3,340 75 F 22,070 21,280 790 U $ 11,040 $ 10,920 $ 120 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 variance. The planning budget was developed using the following formulas, where q is the number of lessons sold: 110 U 150 U 510 U 110 U 15 F Cost Formulas $230q $60q $30q $14q $500+ $10q $1,200 + $2q $3,200+ $1q

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Vulcan Flyovers offers scenic overflights of Mount Saint Helens. Data concerning the company's operations in July appear below: Vulcan Flyovers Operating Data For the Month Ended July 31 Flights (q) Revenue ($350.00q) Expenses: Wages and salaries ($3,200 + $88.00q) Fuel ($32.00g) Airport fees ($830 + $34.00q) Aircraft depreciation ($10.00q) Office expenses ($230 + $1.00q) Total expenses Net operating income Actual Results 54 $ 16,300 7,916 1,894 2,546 540 452 13,348 $ 2,952 Flexible Planning Budget Budget 54 $ 18,900 7,952 1,728 2,666 540 284 13,170 $ 5,730 52 $ 18, 200 7,776 1,664 2,598 520 282 12,840 $5,360 The company measures its activity in terms of flights. Customers can buy individual tickets for overflights or hire an entire plane at a discount.
(This is the middle of the two images) 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 variance. the planning budget was developed using the following formulas, where q is the number of lessons sold: cost formulas revenue $230q instructor wages $60q aircraft depreciation $30q fuel $14q maintenance $500 + $10q ground facility expenses
Flexible-budget variances, review of Chapters 7 and 8. Eric Williams is a cost accountant and business analyst for Diamond Design Company (DDC), which manufactures expensive brass doorknobs. DDC uses two direct-cost categories: direct materials and direct manufacturing labor. Williams feels that manufacturing overhead is most closely related to material usage. Therefore, DDC allocates manufacturing overhead to production based upon pounds of materials used. At the beginning of 2017, DDC budgeted annual production of 420,000 doorknobs and adopted the following standards for each doorknob:
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Critiquing a Report; Calculating Spending Variances Boyne University offers an extensive continuing education program in many cities throughout the state. For the convenience of its faculty and administrative staff and to save costs, the university operates a motor pool. The motor pool’s monthly planning budget is based on operating 20 vehicles; however, for the month of March the university purchased one additional vehicle. The motor pool furnishes gasoline, oil, and other supplies for its automobiles. A mechanic does routine maintenance and minor repairs. Major repairs are performed at a nearby commercial garage. The following cost control report shows actual operating costs for March of the current year compared to the planning budget for March.
The Fantasy Gifts Company, a maker of Holiday novelties, needs your help immediately. The company's accountant resigned without leaving adequate records or explanations for what she did. In reviewing the records, you find the following information for May: Materials Purchased 29,000 units Materials Used 19,500 units You find a copy of the budget which shows that materials were budgeted at $0.50/unit. You know that the material price variance is recorded at the time of purchase and you find some handwritten notes among the accountant's work papers, which indicate the following: Material price variance $ 290 F Material efficiency variance $ 1,050 F What was the total standard cost of direct materials allowed during May? Multiple Choice $8,526. $10,800. $8,700. $10,584.
AirQual Test Corporation provides on-site air quality testing services. The company has provided the following cost formulas and actual results for the month of February: Variable Fixed Component per Month Component per Job $ 277 Actual Total for February $ 27,720 $ 8,350 $ 8,370 Revenue Technician wages $ 8,500 Mobile lab operating expenses $ 4,900 $ 33 Office expenses $ 2,400 $2 $ 2,470 Advertising expenses $ 1,600 $ 1,670 Insurance $ 2,850 $ 2,850 Miscellaneous expenses $ 960 $ 1 $ 375 The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,900 plus $33 per job, and the actual mobile lab operating expenses for February were $8,370. The company expected to work 110 jobs in February, but actually worked 120 jobs. Required: Prepare a flexible budget performance report showing AirQual Test Corporation's revenue and spending variances and activity variances for February. (Indicate the effect of each variance by selecting "F"…
Exercise 9-4 (Algo) Prepare a Flexible Budget Performance Report [LO9-4] Vulcan Flyovers offers scenic overflights of Mount Saint Helens. Data concerning the company's operations in July appear below: Vulcan Flyovers Operating Data For the Month Ended July 31 Flights (q) Revenue ($340.00q) Expenses: Wages and salaries ($3,300 + $91.00q) Fuel ($32.00q) Airport fees ($850 + $31.00q) Aircraft depreciation ($10.00q) Office expenses ($210+ $1.00q) Total expenses Net operating income Actual Results 55 $ 16,100 8,263 1,926 2,410 550 433 13,582 $ 2,518 Flexible Planning Budget Budget 53 $ 18,020 55 $ 18,700 8,305 1,760 2,555 550 265 13,435 $ 5,265 8,123 1,696 2,493 530 263 13,105 $ 4,915 The company measures its activity in terms of flights. Customers can buy individual tickets for overflights or hire an entire plane at a discount.
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