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 FlyoversOperating DataFor the Month Ended July 31 ActualResultsFlexibleBudgetPlanningBudgetFlights (q) 60 60 58 Revenue ($345.00q)$16,500$20,700$20,010Expenses: Wages and salaries ($3,300 + $88.00q) 8,544 8,580 8,404Fuel ($33.00q) 2,144 1,980 1,914Airport fees ($820 + $32.00q) 2,590 2,740 2,676Aircraft depreciation ($9.00q) 540 540 522Office expenses ($240 + $1.00q) 468 300 298Total expense 14,286 14,140 13,814Net operating income$2,214$6,560$6,196 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. Prepare a flexible budget performance report for July that includes revenue and spending variances and activity variances. (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.)

Answered: Vulcan Flyovers offers scenic…

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 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)		60		60		58

Revenue ($345.00q)	$	16,500	$	20,700	$	20,010
Expenses:
Wages and salaries ($3,300 + $88.00q)		8,544		8,580		8,404
Fuel ($33.00q)		2,144		1,980		1,914
Airport fees ($820 + $32.00q)		2,590		2,740		2,676
Aircraft depreciation ($9.00q)		540		540		522
Office expenses ($240 + $1.00q)		468		300		298
Total expense		14,286		14,140		13,814
Net operating income	$	2,214	$	6,560	$	6,196

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. Prepare a flexible budget performance report for July that includes revenue and spending variances and activity variances. (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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