Flexible budget performance report: The statement which shows the performance of flexible budget by comparing with the actual results and the static budget is called a flexible budget performance report. The Flexible budget performance report.

Question

Want to see more full solutions like this?

Answer 1

Question

Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

Chapter 9, Problem 4E

To determine

Flexible budget performance report: The statement which shows the performance of flexible budget by comparing with the actual results and the static budget is called a flexible budget performance report.

The Flexible budget performance report.

Expert Solution & Answer

Answer to Problem 4E

Solution:

Vulcan Flyovers Flexible Budget Performance Report For the Month Ended July 31
	Actual Result	Flexible Budget Variance	Flexible Budget	Sales Volume Variance	Static Budget
Flights (q)	48		48		50
Revenue ($320.00q)	$13,650	$1,710 U	$15,360	$640 U	$16,000
Expenses:
Wages and salaries ($4,000+$82.00q)	$8,430	$494 U	$7,936	$164 F	$8,100
Fuel ($23.00q)	$1,260	$156 U	$1,104	$46 F	$1,150
Airport fees ($650+$38.00q)	$2,350	$124 F	$2,474	$76 F	$2,550
Aircraft depreciation ($7.00q)	$336	-	$336	$14 F	$350
Office expenses ($190+$2.00q)	$460	$174 U	$286	$4 F	$290
Total expense	$12,836	$700 U	$12,136	$304 F	$12,440
Net operating income	$814	$2,410 U	$3,224	$336 U	$3,560
Flights (q)	48	$1,710 U	48	$640 U	50
Revenue ($320.00q)	$13,650		$15,360		$16,000

Vulcan Flyovers Revenue and Spending Variance For the Month Ended July 31
	Actual Results	Flexible Budget	Variance Favorable/ (Unfavorable)
Flights (q)	48	48
Revenue ($320.00q)	$13,650	$15,360	$1,710 U
Expenses:
Wages and salaries ($4,000+$82.00q)	$8,430	$7,936	$494 U
Fuel ($23.00q)	$1,260	$1,104	$156 U
Airport fees ($650+$38.00q)	$2,350	$2,474	$124 F
Aircraft depreciation ($7.00q)	$336	$336	-
Office expenses ($190+$2.00q)	$460	$286	$174 U
Total expense	$12,836	$12,136	$700 U
Net operating income	$814	$3,224	$2,410 U

Vulcan Flyovers Activity Variance For the Month Ended July 31
	Flexible Budget	Planning Budget	Variance Favorable/ (Unfavorable)
Flights (q)	48	50
Revenue ($320.00q)	$15,360	$16,000	$640 U
Expenses:
Wages and salaries ($4,000+$82.00q)	$7,936	$8,100	$164 F
Fuel ($23.00q)	$1,104	$1,150	$46 F
Airport fees ($650+$38.00q)	$2,474	$2,550	$76 F
Aircraft depreciation ($7.00q)	$336	$350	$14 F
Office expenses ($190+$2.00q)	$286	$290	$4 F
Total expense	$12,136	$12,440	$304 F
Net operating income	$3,224	$3,560	$336 U

2) The revenue variance of the company should be the prime concerned of management as it has decreased both in planning budget and flexible budget compared to the actual results attain by the company.

Explanation of Solution

Variance is ascertained by the determining the difference between actual amounts and budgeted amounts. Assuming there is no change in the fixed expense, the variable expense and revenue of the company is computed based on the actual results of the company. A variance which increases the operating income is a favorable variance and variance which decreases the operating income is an unfavorable variance. A favorable variance is symbolized by (F) and unfavorable variance is symbolized by (U).

Given:

Vulcan Flyovers Operating Data For the Month Ended July 31
	Actual Results	Flexible Budget	Planning Budget
Flights (q)	48	48	50
Revenue ($320.00q)	$13,650	$15,360	$16,000
Expenses:
Wages and salaries ($4,000+$82.00q)	$8,430	$7,936	$8,100
Fuel ($23.00q)	$1,260	$1,104	$1,150
Airport fees ($650+$38.00q)	$2,350	$2,474	$2,550
Aircraft depreciation ($7.00q)	$336	$336	$350
Office expenses ($190+$2.00q)	$460	$286	$290
Total expense	$12,836	$12,136	$12,440
Net operating income	$814	$3,224	$3,560

Conclusion

The total unfavorable variance in net operating income of Vulcan Flyovers is $336 which decrease the net operating income compared to the flexible budget. The Vulcan Flyovers has unfavorable variance of $1,710 in revenue and $700 in spending. The main objective behind finding out the variance is to determine the gap between the actual performance and budgeted performance. The variance is taken into consideration while preparing budget of preceding years

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Determine the amount to be paid in full settlement of each invoice, assuming that credit for returns and allowances was received prior to payment and that all invoices were paid within the discount period. Freight Paid Returns and Merchandise by Seller Freight Terms Allowances a. $9,400 $282 FOB Shipping Point, 1/10, net 30 $900 b. $8,600 $60 FOB Destination, 2/10, net 45 $1,900 a. $ b. $

Travis Company purchased merchandise on account from a supplier for $13,200, terms 2/10, net 30 on December 26. Travis Company paid for the merchandise on December 31, within the discount period. Required: Under a perpetual inventory system, record the journal entries required for the above transactions. Refer to the Chart of Accounts for exact wording of account titles.

Cullumber Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2025, Job 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $16,800, direct labor $10,080, and manufacturing overhead $13,440. As of January 1, Job 49 had been completed at a cost of $75,600 and was part of finished goods inventory. There was a $12,600 balance in the Raw Materials Inventory account on January 1. During the month of January, Cullumber Company began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were sold on account during the month for $102,480 and $132,720, respectively. The following additional events occurred during the month. 1. Purchased additional raw materials of $75,600 on account. 2. Incurred factory labor costs of $58,800. 3. Incurred manufacturing overhead costs as follows: depreciation expense on equipment $10,080; and various other…

Answer 2

Question

Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

Chapter 9, Problem 4E

To determine

Flexible budget performance report: The statement which shows the performance of flexible budget by comparing with the actual results and the static budget is called a flexible budget performance report.

The Flexible budget performance report.

Expert Solution & Answer

Answer to Problem 4E

Solution:

Vulcan Flyovers Flexible Budget Performance Report For the Month Ended July 31
	Actual Result	Flexible Budget Variance	Flexible Budget	Sales Volume Variance	Static Budget
Flights (q)	48		48		50
Revenue ($320.00q)	$13,650	$1,710 U	$15,360	$640 U	$16,000
Expenses:
Wages and salaries ($4,000+$82.00q)	$8,430	$494 U	$7,936	$164 F	$8,100
Fuel ($23.00q)	$1,260	$156 U	$1,104	$46 F	$1,150
Airport fees ($650+$38.00q)	$2,350	$124 F	$2,474	$76 F	$2,550
Aircraft depreciation ($7.00q)	$336	-	$336	$14 F	$350
Office expenses ($190+$2.00q)	$460	$174 U	$286	$4 F	$290
Total expense	$12,836	$700 U	$12,136	$304 F	$12,440
Net operating income	$814	$2,410 U	$3,224	$336 U	$3,560
Flights (q)	48	$1,710 U	48	$640 U	50
Revenue ($320.00q)	$13,650		$15,360		$16,000

Vulcan Flyovers Revenue and Spending Variance For the Month Ended July 31
	Actual Results	Flexible Budget	Variance Favorable/ (Unfavorable)
Flights (q)	48	48
Revenue ($320.00q)	$13,650	$15,360	$1,710 U
Expenses:
Wages and salaries ($4,000+$82.00q)	$8,430	$7,936	$494 U
Fuel ($23.00q)	$1,260	$1,104	$156 U
Airport fees ($650+$38.00q)	$2,350	$2,474	$124 F
Aircraft depreciation ($7.00q)	$336	$336	-
Office expenses ($190+$2.00q)	$460	$286	$174 U
Total expense	$12,836	$12,136	$700 U
Net operating income	$814	$3,224	$2,410 U

Vulcan Flyovers Activity Variance For the Month Ended July 31
	Flexible Budget	Planning Budget	Variance Favorable/ (Unfavorable)
Flights (q)	48	50
Revenue ($320.00q)	$15,360	$16,000	$640 U
Expenses:
Wages and salaries ($4,000+$82.00q)	$7,936	$8,100	$164 F
Fuel ($23.00q)	$1,104	$1,150	$46 F
Airport fees ($650+$38.00q)	$2,474	$2,550	$76 F
Aircraft depreciation ($7.00q)	$336	$350	$14 F
Office expenses ($190+$2.00q)	$286	$290	$4 F
Total expense	$12,136	$12,440	$304 F
Net operating income	$3,224	$3,560	$336 U

2) The revenue variance of the company should be the prime concerned of management as it has decreased both in planning budget and flexible budget compared to the actual results attain by the company.

Explanation of Solution

Variance is ascertained by the determining the difference between actual amounts and budgeted amounts. Assuming there is no change in the fixed expense, the variable expense and revenue of the company is computed based on the actual results of the company. A variance which increases the operating income is a favorable variance and variance which decreases the operating income is an unfavorable variance. A favorable variance is symbolized by (F) and unfavorable variance is symbolized by (U).

Given:

Vulcan Flyovers Operating Data For the Month Ended July 31
	Actual Results	Flexible Budget	Planning Budget
Flights (q)	48	48	50
Revenue ($320.00q)	$13,650	$15,360	$16,000
Expenses:
Wages and salaries ($4,000+$82.00q)	$8,430	$7,936	$8,100
Fuel ($23.00q)	$1,260	$1,104	$1,150
Airport fees ($650+$38.00q)	$2,350	$2,474	$2,550
Aircraft depreciation ($7.00q)	$336	$336	$350
Office expenses ($190+$2.00q)	$460	$286	$290
Total expense	$12,836	$12,136	$12,440
Net operating income	$814	$3,224	$3,560

Conclusion

The total unfavorable variance in net operating income of Vulcan Flyovers is $336 which decrease the net operating income compared to the flexible budget. The Vulcan Flyovers has unfavorable variance of $1,710 in revenue and $700 in spending. The main objective behind finding out the variance is to determine the gap between the actual performance and budgeted performance. The variance is taken into consideration while preparing budget of preceding years

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

Chapter 9, Problem 4E

To determine

Flexible budget performance report: The statement which shows the performance of flexible budget by comparing with the actual results and the static budget is called a flexible budget performance report.

The Flexible budget performance report.

Expert Solution & Answer

Answer to Problem 4E

Solution:

Vulcan Flyovers Flexible Budget Performance Report For the Month Ended July 31
	Actual Result	Flexible Budget Variance	Flexible Budget	Sales Volume Variance	Static Budget
Flights (q)	48		48		50
Revenue ($320.00q)	$13,650	$1,710 U	$15,360	$640 U	$16,000
Expenses:
Wages and salaries ($4,000+$82.00q)	$8,430	$494 U	$7,936	$164 F	$8,100
Fuel ($23.00q)	$1,260	$156 U	$1,104	$46 F	$1,150
Airport fees ($650+$38.00q)	$2,350	$124 F	$2,474	$76 F	$2,550
Aircraft depreciation ($7.00q)	$336	-	$336	$14 F	$350
Office expenses ($190+$2.00q)	$460	$174 U	$286	$4 F	$290
Total expense	$12,836	$700 U	$12,136	$304 F	$12,440
Net operating income	$814	$2,410 U	$3,224	$336 U	$3,560
Flights (q)	48	$1,710 U	48	$640 U	50
Revenue ($320.00q)	$13,650		$15,360		$16,000

Vulcan Flyovers Revenue and Spending Variance For the Month Ended July 31
	Actual Results	Flexible Budget	Variance Favorable/ (Unfavorable)
Flights (q)	48	48
Revenue ($320.00q)	$13,650	$15,360	$1,710 U
Expenses:
Wages and salaries ($4,000+$82.00q)	$8,430	$7,936	$494 U
Fuel ($23.00q)	$1,260	$1,104	$156 U
Airport fees ($650+$38.00q)	$2,350	$2,474	$124 F
Aircraft depreciation ($7.00q)	$336	$336	-
Office expenses ($190+$2.00q)	$460	$286	$174 U
Total expense	$12,836	$12,136	$700 U
Net operating income	$814	$3,224	$2,410 U

Vulcan Flyovers Activity Variance For the Month Ended July 31
	Flexible Budget	Planning Budget	Variance Favorable/ (Unfavorable)
Flights (q)	48	50
Revenue ($320.00q)	$15,360	$16,000	$640 U
Expenses:
Wages and salaries ($4,000+$82.00q)	$7,936	$8,100	$164 F
Fuel ($23.00q)	$1,104	$1,150	$46 F
Airport fees ($650+$38.00q)	$2,474	$2,550	$76 F
Aircraft depreciation ($7.00q)	$336	$350	$14 F
Office expenses ($190+$2.00q)	$286	$290	$4 F
Total expense	$12,136	$12,440	$304 F
Net operating income	$3,224	$3,560	$336 U

2) The revenue variance of the company should be the prime concerned of management as it has decreased both in planning budget and flexible budget compared to the actual results attain by the company.

Explanation of Solution

Variance is ascertained by the determining the difference between actual amounts and budgeted amounts. Assuming there is no change in the fixed expense, the variable expense and revenue of the company is computed based on the actual results of the company. A variance which increases the operating income is a favorable variance and variance which decreases the operating income is an unfavorable variance. A favorable variance is symbolized by (F) and unfavorable variance is symbolized by (U).

Given:

Vulcan Flyovers Operating Data For the Month Ended July 31
	Actual Results	Flexible Budget	Planning Budget
Flights (q)	48	48	50
Revenue ($320.00q)	$13,650	$15,360	$16,000
Expenses:
Wages and salaries ($4,000+$82.00q)	$8,430	$7,936	$8,100
Fuel ($23.00q)	$1,260	$1,104	$1,150
Airport fees ($650+$38.00q)	$2,350	$2,474	$2,550
Aircraft depreciation ($7.00q)	$336	$336	$350
Office expenses ($190+$2.00q)	$460	$286	$290
Total expense	$12,836	$12,136	$12,440
Net operating income	$814	$3,224	$3,560

Conclusion

The total unfavorable variance in net operating income of Vulcan Flyovers is $336 which decrease the net operating income compared to the flexible budget. The Vulcan Flyovers has unfavorable variance of $1,710 in revenue and $700 in spending. The main objective behind finding out the variance is to determine the gap between the actual performance and budgeted performance. The variance is taken into consideration while preparing budget of preceding years

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

Chapter 9, Problem 4E

To determine

Flexible budget performance report: The statement which shows the performance of flexible budget by comparing with the actual results and the static budget is called a flexible budget performance report.

The Flexible budget performance report.

Expert Solution & Answer

Answer to Problem 4E

Solution:

Vulcan Flyovers Flexible Budget Performance Report For the Month Ended July 31
	Actual Result	Flexible Budget Variance	Flexible Budget	Sales Volume Variance	Static Budget
Flights (q)	48		48		50
Revenue ($320.00q)	$13,650	$1,710 U	$15,360	$640 U	$16,000
Expenses:
Wages and salaries ($4,000+$82.00q)	$8,430	$494 U	$7,936	$164 F	$8,100
Fuel ($23.00q)	$1,260	$156 U	$1,104	$46 F	$1,150
Airport fees ($650+$38.00q)	$2,350	$124 F	$2,474	$76 F	$2,550
Aircraft depreciation ($7.00q)	$336	-	$336	$14 F	$350
Office expenses ($190+$2.00q)	$460	$174 U	$286	$4 F	$290
Total expense	$12,836	$700 U	$12,136	$304 F	$12,440
Net operating income	$814	$2,410 U	$3,224	$336 U	$3,560
Flights (q)	48	$1,710 U	48	$640 U	50
Revenue ($320.00q)	$13,650		$15,360		$16,000

Vulcan Flyovers Revenue and Spending Variance For the Month Ended July 31
	Actual Results	Flexible Budget	Variance Favorable/ (Unfavorable)
Flights (q)	48	48
Revenue ($320.00q)	$13,650	$15,360	$1,710 U
Expenses:
Wages and salaries ($4,000+$82.00q)	$8,430	$7,936	$494 U
Fuel ($23.00q)	$1,260	$1,104	$156 U
Airport fees ($650+$38.00q)	$2,350	$2,474	$124 F
Aircraft depreciation ($7.00q)	$336	$336	-
Office expenses ($190+$2.00q)	$460	$286	$174 U
Total expense	$12,836	$12,136	$700 U
Net operating income	$814	$3,224	$2,410 U

Vulcan Flyovers Activity Variance For the Month Ended July 31
	Flexible Budget	Planning Budget	Variance Favorable/ (Unfavorable)
Flights (q)	48	50
Revenue ($320.00q)	$15,360	$16,000	$640 U
Expenses:
Wages and salaries ($4,000+$82.00q)	$7,936	$8,100	$164 F
Fuel ($23.00q)	$1,104	$1,150	$46 F
Airport fees ($650+$38.00q)	$2,474	$2,550	$76 F
Aircraft depreciation ($7.00q)	$336	$350	$14 F
Office expenses ($190+$2.00q)	$286	$290	$4 F
Total expense	$12,136	$12,440	$304 F
Net operating income	$3,224	$3,560	$336 U

2) The revenue variance of the company should be the prime concerned of management as it has decreased both in planning budget and flexible budget compared to the actual results attain by the company.

Explanation of Solution

Variance is ascertained by the determining the difference between actual amounts and budgeted amounts. Assuming there is no change in the fixed expense, the variable expense and revenue of the company is computed based on the actual results of the company. A variance which increases the operating income is a favorable variance and variance which decreases the operating income is an unfavorable variance. A favorable variance is symbolized by (F) and unfavorable variance is symbolized by (U).

Given:

Vulcan Flyovers Operating Data For the Month Ended July 31
	Actual Results	Flexible Budget	Planning Budget
Flights (q)	48	48	50
Revenue ($320.00q)	$13,650	$15,360	$16,000
Expenses:
Wages and salaries ($4,000+$82.00q)	$8,430	$7,936	$8,100
Fuel ($23.00q)	$1,260	$1,104	$1,150
Airport fees ($650+$38.00q)	$2,350	$2,474	$2,550
Aircraft depreciation ($7.00q)	$336	$336	$350
Office expenses ($190+$2.00q)	$460	$286	$290
Total expense	$12,836	$12,136	$12,440
Net operating income	$814	$3,224	$3,560

Conclusion

The total unfavorable variance in net operating income of Vulcan Flyovers is $336 which decrease the net operating income compared to the flexible budget. The Vulcan Flyovers has unfavorable variance of $1,710 in revenue and $700 in spending. The main objective behind finding out the variance is to determine the gap between the actual performance and budgeted performance. The variance is taken into consideration while preparing budget of preceding years

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 9, Problem 4E

To determine

Flexible budget performance report: The statement which shows the performance of flexible budget by comparing with the actual results and the static budget is called a flexible budget performance report.

The Flexible budget performance report.

Expert Solution & Answer

Answer to Problem 4E

Solution:

Vulcan Flyovers Flexible Budget Performance Report For the Month Ended July 31
	Actual Result	Flexible Budget Variance	Flexible Budget	Sales Volume Variance	Static Budget
Flights (q)	48		48		50
Revenue ($320.00q)	$13,650	$1,710 U	$15,360	$640 U	$16,000
Expenses:
Wages and salaries ($4,000+$82.00q)	$8,430	$494 U	$7,936	$164 F	$8,100
Fuel ($23.00q)	$1,260	$156 U	$1,104	$46 F	$1,150
Airport fees ($650+$38.00q)	$2,350	$124 F	$2,474	$76 F	$2,550
Aircraft depreciation ($7.00q)	$336	-	$336	$14 F	$350
Office expenses ($190+$2.00q)	$460	$174 U	$286	$4 F	$290
Total expense	$12,836	$700 U	$12,136	$304 F	$12,440
Net operating income	$814	$2,410 U	$3,224	$336 U	$3,560
Flights (q)	48	$1,710 U	48	$640 U	50
Revenue ($320.00q)	$13,650		$15,360		$16,000

Vulcan Flyovers Revenue and Spending Variance For the Month Ended July 31
	Actual Results	Flexible Budget	Variance Favorable/ (Unfavorable)
Flights (q)	48	48
Revenue ($320.00q)	$13,650	$15,360	$1,710 U
Expenses:
Wages and salaries ($4,000+$82.00q)	$8,430	$7,936	$494 U
Fuel ($23.00q)	$1,260	$1,104	$156 U
Airport fees ($650+$38.00q)	$2,350	$2,474	$124 F
Aircraft depreciation ($7.00q)	$336	$336	-
Office expenses ($190+$2.00q)	$460	$286	$174 U
Total expense	$12,836	$12,136	$700 U
Net operating income	$814	$3,224	$2,410 U

Vulcan Flyovers Activity Variance For the Month Ended July 31
	Flexible Budget	Planning Budget	Variance Favorable/ (Unfavorable)
Flights (q)	48	50
Revenue ($320.00q)	$15,360	$16,000	$640 U
Expenses:
Wages and salaries ($4,000+$82.00q)	$7,936	$8,100	$164 F
Fuel ($23.00q)	$1,104	$1,150	$46 F
Airport fees ($650+$38.00q)	$2,474	$2,550	$76 F
Aircraft depreciation ($7.00q)	$336	$350	$14 F
Office expenses ($190+$2.00q)	$286	$290	$4 F
Total expense	$12,136	$12,440	$304 F
Net operating income	$3,224	$3,560	$336 U

2) The revenue variance of the company should be the prime concerned of management as it has decreased both in planning budget and flexible budget compared to the actual results attain by the company.

Explanation of Solution

Variance is ascertained by the determining the difference between actual amounts and budgeted amounts. Assuming there is no change in the fixed expense, the variable expense and revenue of the company is computed based on the actual results of the company. A variance which increases the operating income is a favorable variance and variance which decreases the operating income is an unfavorable variance. A favorable variance is symbolized by (F) and unfavorable variance is symbolized by (U).

Given:

Vulcan Flyovers Operating Data For the Month Ended July 31
	Actual Results	Flexible Budget	Planning Budget
Flights (q)	48	48	50
Revenue ($320.00q)	$13,650	$15,360	$16,000
Expenses:
Wages and salaries ($4,000+$82.00q)	$8,430	$7,936	$8,100
Fuel ($23.00q)	$1,260	$1,104	$1,150
Airport fees ($650+$38.00q)	$2,350	$2,474	$2,550
Aircraft depreciation ($7.00q)	$336	$336	$350
Office expenses ($190+$2.00q)	$460	$286	$290
Total expense	$12,836	$12,136	$12,440
Net operating income	$814	$3,224	$3,560

Conclusion

The total unfavorable variance in net operating income of Vulcan Flyovers is $336 which decrease the net operating income compared to the flexible budget. The Vulcan Flyovers has unfavorable variance of $1,710 in revenue and $700 in spending. The main objective behind finding out the variance is to determine the gap between the actual performance and budgeted performance. The variance is taken into consideration while preparing budget of preceding years

Answer 6

Chapter 9, Problem 4E

To determine

Flexible budget performance report: The statement which shows the performance of flexible budget by comparing with the actual results and the static budget is called a flexible budget performance report.

The Flexible budget performance report.

Expert Solution & Answer

Answer to Problem 4E

Solution:

Vulcan Flyovers Flexible Budget Performance Report For the Month Ended July 31
	Actual Result	Flexible Budget Variance	Flexible Budget	Sales Volume Variance	Static Budget
Flights (q)	48		48		50
Revenue ($320.00q)	$13,650	$1,710 U	$15,360	$640 U	$16,000
Expenses:
Wages and salaries ($4,000+$82.00q)	$8,430	$494 U	$7,936	$164 F	$8,100
Fuel ($23.00q)	$1,260	$156 U	$1,104	$46 F	$1,150
Airport fees ($650+$38.00q)	$2,350	$124 F	$2,474	$76 F	$2,550
Aircraft depreciation ($7.00q)	$336	-	$336	$14 F	$350
Office expenses ($190+$2.00q)	$460	$174 U	$286	$4 F	$290
Total expense	$12,836	$700 U	$12,136	$304 F	$12,440
Net operating income	$814	$2,410 U	$3,224	$336 U	$3,560
Flights (q)	48	$1,710 U	48	$640 U	50
Revenue ($320.00q)	$13,650		$15,360		$16,000

Vulcan Flyovers Revenue and Spending Variance For the Month Ended July 31
	Actual Results	Flexible Budget	Variance Favorable/ (Unfavorable)
Flights (q)	48	48
Revenue ($320.00q)	$13,650	$15,360	$1,710 U
Expenses:
Wages and salaries ($4,000+$82.00q)	$8,430	$7,936	$494 U
Fuel ($23.00q)	$1,260	$1,104	$156 U
Airport fees ($650+$38.00q)	$2,350	$2,474	$124 F
Aircraft depreciation ($7.00q)	$336	$336	-
Office expenses ($190+$2.00q)	$460	$286	$174 U
Total expense	$12,836	$12,136	$700 U
Net operating income	$814	$3,224	$2,410 U

Vulcan Flyovers Activity Variance For the Month Ended July 31
	Flexible Budget	Planning Budget	Variance Favorable/ (Unfavorable)
Flights (q)	48	50
Revenue ($320.00q)	$15,360	$16,000	$640 U
Expenses:
Wages and salaries ($4,000+$82.00q)	$7,936	$8,100	$164 F
Fuel ($23.00q)	$1,104	$1,150	$46 F
Airport fees ($650+$38.00q)	$2,474	$2,550	$76 F
Aircraft depreciation ($7.00q)	$336	$350	$14 F
Office expenses ($190+$2.00q)	$286	$290	$4 F
Total expense	$12,136	$12,440	$304 F
Net operating income	$3,224	$3,560	$336 U

2) The revenue variance of the company should be the prime concerned of management as it has decreased both in planning budget and flexible budget compared to the actual results attain by the company.

Explanation of Solution

Variance is ascertained by the determining the difference between actual amounts and budgeted amounts. Assuming there is no change in the fixed expense, the variable expense and revenue of the company is computed based on the actual results of the company. A variance which increases the operating income is a favorable variance and variance which decreases the operating income is an unfavorable variance. A favorable variance is symbolized by (F) and unfavorable variance is symbolized by (U).

Given:

Vulcan Flyovers Operating Data For the Month Ended July 31
	Actual Results	Flexible Budget	Planning Budget
Flights (q)	48	48	50
Revenue ($320.00q)	$13,650	$15,360	$16,000
Expenses:
Wages and salaries ($4,000+$82.00q)	$8,430	$7,936	$8,100
Fuel ($23.00q)	$1,260	$1,104	$1,150
Airport fees ($650+$38.00q)	$2,350	$2,474	$2,550
Aircraft depreciation ($7.00q)	$336	$336	$350
Office expenses ($190+$2.00q)	$460	$286	$290
Total expense	$12,836	$12,136	$12,440
Net operating income	$814	$3,224	$3,560

Conclusion

The total unfavorable variance in net operating income of Vulcan Flyovers is $336 which decrease the net operating income compared to the flexible budget. The Vulcan Flyovers has unfavorable variance of $1,710 in revenue and $700 in spending. The main objective behind finding out the variance is to determine the gap between the actual performance and budgeted performance. The variance is taken into consideration while preparing budget of preceding years

Answer 7

Chapter 9, Problem 4E

To determine

Flexible budget performance report: The statement which shows the performance of flexible budget by comparing with the actual results and the static budget is called a flexible budget performance report.

The Flexible budget performance report.

Answer 8

Expert Solution & Answer

Answer to Problem 4E

Solution:

Vulcan Flyovers Flexible Budget Performance Report For the Month Ended July 31
	Actual Result	Flexible Budget Variance	Flexible Budget	Sales Volume Variance	Static Budget
Flights (q)	48		48		50
Revenue ($320.00q)	$13,650	$1,710 U	$15,360	$640 U	$16,000
Expenses:
Wages and salaries ($4,000+$82.00q)	$8,430	$494 U	$7,936	$164 F	$8,100
Fuel ($23.00q)	$1,260	$156 U	$1,104	$46 F	$1,150
Airport fees ($650+$38.00q)	$2,350	$124 F	$2,474	$76 F	$2,550
Aircraft depreciation ($7.00q)	$336	-	$336	$14 F	$350
Office expenses ($190+$2.00q)	$460	$174 U	$286	$4 F	$290
Total expense	$12,836	$700 U	$12,136	$304 F	$12,440
Net operating income	$814	$2,410 U	$3,224	$336 U	$3,560
Flights (q)	48	$1,710 U	48	$640 U	50
Revenue ($320.00q)	$13,650		$15,360		$16,000

Vulcan Flyovers Revenue and Spending Variance For the Month Ended July 31
	Actual Results	Flexible Budget	Variance Favorable/ (Unfavorable)
Flights (q)	48	48
Revenue ($320.00q)	$13,650	$15,360	$1,710 U
Expenses:
Wages and salaries ($4,000+$82.00q)	$8,430	$7,936	$494 U
Fuel ($23.00q)	$1,260	$1,104	$156 U
Airport fees ($650+$38.00q)	$2,350	$2,474	$124 F
Aircraft depreciation ($7.00q)	$336	$336	-
Office expenses ($190+$2.00q)	$460	$286	$174 U
Total expense	$12,836	$12,136	$700 U
Net operating income	$814	$3,224	$2,410 U

Vulcan Flyovers Activity Variance For the Month Ended July 31
	Flexible Budget	Planning Budget	Variance Favorable/ (Unfavorable)
Flights (q)	48	50
Revenue ($320.00q)	$15,360	$16,000	$640 U
Expenses:
Wages and salaries ($4,000+$82.00q)	$7,936	$8,100	$164 F
Fuel ($23.00q)	$1,104	$1,150	$46 F
Airport fees ($650+$38.00q)	$2,474	$2,550	$76 F
Aircraft depreciation ($7.00q)	$336	$350	$14 F
Office expenses ($190+$2.00q)	$286	$290	$4 F
Total expense	$12,136	$12,440	$304 F
Net operating income	$3,224	$3,560	$336 U

2) The revenue variance of the company should be the prime concerned of management as it has decreased both in planning budget and flexible budget compared to the actual results attain by the company.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

Variance is ascertained by the determining the difference between actual amounts and budgeted amounts. Assuming there is no change in the fixed expense, the variable expense and revenue of the company is computed based on the actual results of the company. A variance which increases the operating income is a favorable variance and variance which decreases the operating income is an unfavorable variance. A favorable variance is symbolized by (F) and unfavorable variance is symbolized by (U).

Given:

Vulcan Flyovers Operating Data For the Month Ended July 31
	Actual Results	Flexible Budget	Planning Budget
Flights (q)	48	48	50
Revenue ($320.00q)	$13,650	$15,360	$16,000
Expenses:
Wages and salaries ($4,000+$82.00q)	$8,430	$7,936	$8,100
Fuel ($23.00q)	$1,260	$1,104	$1,150
Airport fees ($650+$38.00q)	$2,350	$2,474	$2,550
Aircraft depreciation ($7.00q)	$336	$336	$350
Office expenses ($190+$2.00q)	$460	$286	$290
Total expense	$12,836	$12,136	$12,440
Net operating income	$814	$3,224	$3,560

Answer 12

Conclusion

The total unfavorable variance in net operating income of Vulcan Flyovers is $336 which decrease the net operating income compared to the flexible budget. The Vulcan Flyovers has unfavorable variance of $1,710 in revenue and $700 in spending. The main objective behind finding out the variance is to determine the gap between the actual performance and budgeted performance. The variance is taken into consideration while preparing budget of preceding years