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.
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.
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 |
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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