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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 210 $ 52,230 205 $51,250 $ 980 F 14,530 14,350 180 U 6,720 6,560 160 U 3,655 3,075 580 U 3,415 3,235 180 U 1,910 1,960 50 F 3,435 33,665 3,545 32,725 110 F 940 U $ 18,565 $ 18,525 $ 40 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 $2509 $709 $329 $159 $570 + $13q Ground facility expenses $1,550 + $2q $3,340 +$1q Fuel 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 (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 210 $ 52,230 205 $51,250 $ 980 F 14,530 14,350 180 U 6,720 6,560 160 U 3,655 3,075 580 U 3,415 3,235 180 U 1,910 1,960 50 F 3,435 33,665 3,545 32,725 110 F 940 U $ 18,565 $ 18,525 $ 40 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 $2509 $709 $329 $159 $570 + $13q Ground facility expenses $1,550 + $2q $3,340 +$1q Fuel 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 (i.e., zero variance). Input all amounts as positive values.

FINANCIAL ACCOUNTING
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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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 210 205 $ 52,230 $ 51,250 $ 980 F 14,530 14,350 180 U 6,720 6,560 160 U 3,655 3,075 580 U 3,415 3,235 180 U 1,910 1,960 50 F 3,435 3,545 110 F 33,665 32,725 940 U $ 18,565 $ 18,525 $ 40 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 $2509 $709 $32q $15q Fuel $570 +$13q Ground facility expenses $1,550 +$2q $3,340 +$19 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 (i.e., zero variance). Input all amounts as positive values. Tip Top Flight School Flexible Budget Performance Report For the Month Ended July 31 Lessons Revenue Expenses Actual Results 210 $ 52,230 Flexible Budget Planning Budget 205 $ 51,250 Instructor wages 14,530 14,350 Aircraft depreciation 6,720 6,560 Fuel 3,655 3,075 Maintenance 3,415 3,235 Ground facility expenses 1,910 1,960 Administration 3,435 3,545 Total expense 33,665 32,725 Net operating income $ 18,565 $ 18,525
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 210 205 $ 52,230 $ 51,250 $ 980 F 14,530 14,350 180 U 6,720 6,560 160 U 3,655 3,075 580 U 3,415 3,235 180 U 1,910 1,960 50 F 3,435 3,545 110 F 33,665 32,725 940 U $ 18,565 $ 18,525 $ 40 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 $2509 $709 $32q $15q Fuel $570 +$13q Ground facility expenses $1,550 +$2q $3,340 +$19 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 (i.e., zero variance). Input all amounts as positive values. Tip Top Flight School Flexible Budget Performance Report For the Month Ended July 31 Lessons Revenue Expenses Actual Results 210 $ 52,230 Flexible Budget Planning Budget 205 $ 51,250 Instructor wages 14,530 14,350 Aircraft depreciation 6,720 6,560 Fuel 3,655 3,075 Maintenance 3,415 3,235 Ground facility expenses 1,910 1,960 Administration 3,435 3,545 Total expense 33,665 32,725 Net operating income $ 18,565 $ 18,525
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