Answer Happy

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: TipTop Flight School Variance Report For the Month Ended July 31 Actual Results 180 Planning Budget Variances Lessons 175 Revenue $ 41,290 $ 40,250 $ 1,040 P Expenses: Instructor wages 10,645 10,500 145 U 6,840 6,650 190 U Aircraft depreciation Fuel 3,090 2,450 640 U Maintenance 2,700 2,555 145 U 2,470 2,550 80 P Ground facility expenses Administration 3,985 100 F 3,885 29,630 28,690 940 U Total expense $ 11,660 $ 11,560 $ 100 F Net operating income: 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:
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: Cost Formulas Revenue $230g Instructor wages $60g Aircraft depreciation $38q Fuel $14g Maintenance $630+ $11gq $1,850 $4g Ground facility expenses Administration $3,460 + $3g 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. Flexible Budget Performance Report For the Month Ended July 31 Revenue and Spending Variances. Actual Results 180 $ 41,290 10,645 6,840 3,090 2,700 2,470 3,885 29,630 $ 11,660 Flexible Budget Activity Variances Planning Budget 175 $ 40,250 10,500 6,650 2,450 2,555 2,550 3,985 28,690 11,560 $