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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: Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration Total expense Net operating income TipTop Flight School Variance Report For the Month Ended July 31 Actual Results Planning Budget Variances 198 185 $ 45,450 $ 44,400 $ 1,050 F 12,180 12,025 155 U 7.418 7,215 195 U 3,425 2,775 650 U 3,015 2,860 155 U 2,925 3,010 85 F 4,295 4,405 110 F 33,250 32,290 960 U $ 12,200 $ 12,110 $ 90 F After several months of using these 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: Revenue Instructor wages Aircraft depreciation Cost Formulas $240q $65q $39q $15q $640 + $12q Ground facility expenses $1,900 + $6q $3,480 + $50 Fuel Maintenance Administration Required: 2. Complete the flexible budget performance report for the school for July. (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.)

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: Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration Total expense Net operating income TipTop Flight School Variance Report For the Month Ended July 31 Actual Results Planning Budget Variances 198 185 $ 45,450 $ 44,400 $ 1,050 F 12,180 12,025 155 U 7.418 7,215 195 U 3,425 2,775 650 U 3,015 2,860 155 U 2,925 3,010 85 F 4,295 4,405 110 F 33,250 32,290 960 U $ 12,200 $ 12,110 $ 90 F After several months of using these 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: Revenue Instructor wages Aircraft depreciation Cost Formulas $240q $65q $39q $15q $640 + $12q Ground facility expenses $1,900 + $6q $3,480 + $50 Fuel Maintenance Administration Required: 2. Complete the flexible budget performance report for the school for July. (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.)

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter7: Variable Costing For Management analysis
Section: Chapter Questions
Problem 18E: Variable costing income statement for a service company The actual and planned data for Underwater...
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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: Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration Total expense Net operating income TipTop Flight School Variance Report For the Month Ended July 31 Actual Results Planning Budget Variances 198 185 $ 45,450 $ 44,400 $ 1,050 F 12,180 12,025 155 U 7.418 7,215 195 U 3,425 2,775 650 U 3,015 2,860 155 U 2,925 3,010 85 F 4,295 4,405 110 F 33,250 32,290 960 U $ 12,200 $ 12,110 $ 90 F After several months of using these 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: Revenue Instructor wages Aircraft depreciation Cost Formulas $240q $65q $39q $15q $640 + $12q Ground facility expenses $1,900 + $6q $3,480 + $50 Fuel Maintenance Administration Required: 2. Complete the flexible budget performance report for the school for July. (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.)
Transcribed Image Text: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: Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration Total expense Net operating income TipTop Flight School Variance Report For the Month Ended July 31 Actual Results Planning Budget Variances 198 185 $ 45,450 $ 44,400 $ 1,050 F 12,180 12,025 155 U 7.418 7,215 195 U 3,425 2,775 650 U 3,015 2,860 155 U 2,925 3,010 85 F 4,295 4,405 110 F 33,250 32,290 960 U $ 12,200 $ 12,110 $ 90 F After several months of using these 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: Revenue Instructor wages Aircraft depreciation Cost Formulas $240q $65q $39q $15q $640 + $12q Ground facility expenses $1,900 + $6q $3,480 + $50 Fuel Maintenance Administration Required: 2. Complete the flexible budget performance report for the school for July. (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.)
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