Question

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)		55		55		53
Revenue ($340.00q)	$	16,400	$	18,700	$	18,020
Expenses:
Wages and salaries ($3,600 + $86.00q)		8,298		8,330		8,158
Fuel ($32.00q)		1,926		1,760		1,696
Airport fees ($830 + $35.00q)		2,630		2,755		2,685
Aircraft depreciation ($10.00q)		550		550		530
Office expenses ($230 + $1.00q)		453		285		283
Total expense		13,857		13,680		13,352
Net operating income	$	2,543	$	5,020	$	4,668

  

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. Complete the flexible budget performance report abstract for July.

Answer 1

	Actual results	Revenue and spending variances		Flexible budget	Activity variances		Planning budget
Flights	55			55			53
Revenue	16400	2300	U	18700	680	F	18020
Expenses:
Wages and salaries	8298	32	F	8330	172	U	8158
Fuel	1926	166	U	1760	64	U	1696
Airport fees	2630	125	F	2755	70	U	2685
Aircraft depreciation	550	0	None	550	20	U	530
Office expenses	453	168	U	285	2	U	283
Total expenses	13857	177	U	13680	328	U	13352
Net operating income	2543	2477	U	5020	352	F	4668