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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 vagen Aircraft depreciation Fuel Maintenance Ground facility expenses Administration. TipTop Flight School Variance Report For the Month Ended July 31 Actual Resulta Total expense Net operating income Revenue Instructor vages Aireraft depreciation Fuel 240 $55,060 11,865 6,400 4,840 Maintenance Ground facility expensen Administration 4,240 2,810 4,280 36,435 $ 18,625 $500 $354 Planning Budget $184 $600+ $15g 235 $ 54,050 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. 31,706 , 95g $3,400+ $4g 11,750 8,225 4,230 4,125 2,875 4,340 35,545 $ 18,505 The planning budget was developed using the following formulas, where q is the number of lessons sold: Cost Formulas $230 Variances $ 1,010 P 115 U 175 U 610 U 115 U 65 F 60 F 890 U $ 120 P

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 vagen Aircraft depreciation Fuel Maintenance Ground facility expenses Administration. TipTop Flight School Variance Report For the Month Ended July 31 Actual Resulta Total expense Net operating income Revenue Instructor vages Aireraft depreciation Fuel 240 $55,060 11,865 6,400 4,840 Maintenance Ground facility expensen Administration 4,240 2,810 4,280 36,435 $ 18,625 $500 $354 Planning Budget $184 $600+ $15g 235 $ 54,050 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. 31,706 , 95g $3,400+ $4g 11,750 8,225 4,230 4,125 2,875 4,340 35,545 $ 18,505 The planning budget was developed using the following formulas, where q is the number of lessons sold: Cost Formulas $230 Variances $ 1,010 P 115 U 175 U 610 U 115 U 65 F 60 F 890 U $ 120 P

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 vagen Aircraft depreciation Fuel TipTop Flight School Variance Report For the Month Ended July 31 Actual Results Maintenance Ground facility expenses Administration Total expense Net operating income Revenue Instructor vages Aireraft depreciation. Fuel 240 $55,060 Haintenance Ground facility expenses Administration 11,865 6,400 4,840 4,240 2,810 4,280 36,435 $ 18,625 Cost Formulas $230g $50g $354 $184 Planning Budget $600+ $15g 31,700 -95g $3,400 $40 235 $ 54,050 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: 11,750 8,225 4,230 4,125 2,875 4,340 35,545 $ 18,505 Variances $ 1,010 F 115 U 175 U 610 U 115 U 65 F 60 P 890 U $120 P
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 vagen Aircraft depreciation Fuel TipTop Flight School Variance Report For the Month Ended July 31 Actual Results Maintenance Ground facility expenses Administration Total expense Net operating income Revenue Instructor vages Aireraft depreciation. Fuel 240 $55,060 Haintenance Ground facility expenses Administration 11,865 6,400 4,840 4,240 2,810 4,280 36,435 $ 18,625 Cost Formulas $230g $50g $354 $184 Planning Budget $600+ $15g 31,700 -95g $3,400 $40 235 $ 54,050 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: 11,750 8,225 4,230 4,125 2,875 4,340 35,545 $ 18,505 Variances $ 1,010 F 115 U 175 U 610 U 115 U 65 F 60 P 890 U $120 P
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.) Lessons Revenue Expenses: Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration Total expense Net operating income TipTop Flight School Flexible Budget Performance Report For the Month Ended July 31 Actual Results 240 $ 55,060 11,865 8,400 4,840 4,240 2,810 4,280 36,435 $ 18,625 Flexible Budget * Planning Budget 235 $ 54,050 11,750 8,225 4,230 4,125 2,875 4,340. 35,545 $ 18,505 Help Save & Exis
Transcribed Image Text: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.) Lessons Revenue Expenses: Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration Total expense Net operating income TipTop Flight School Flexible Budget Performance Report For the Month Ended July 31 Actual Results 240 $ 55,060 11,865 8,400 4,840 4,240 2,810 4,280 36,435 $ 18,625 Flexible Budget * Planning Budget 235 $ 54,050 11,750 8,225 4,230 4,125 2,875 4,340. 35,545 $ 18,505 Help Save & Exis
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