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 31Planning Flexible ActualBudget Budget ResultsFlights (q) .................................................................. 50 48 48Revenue ($320.00q) .................................................. $16,000 $15,360 $13,650Expenses:Wages and salaries ($4,000 $82.00q) ............... 8,100 7,936 8,430Fuel ($23.00q) ....................................................... 1,150 1,104 1,260Airport fees ($650 $38.00q) ............................... 2,550 2,474 2,350Aircraft depreciation ($7.00q) ................................ 350 336 336Office expenses ($190 $2.00q) .......................... 290 286 460Total expense ............................................................ 12,440 12,136 12,836Net operating income ................................................ $ 3,560 $ 3,224 $ 814The company measures its activity in terms of flights. Customers can buy individual tickets for overflightsor hire an entire plane for an overflight at a discount.Required:1. Prepare a flexible budget performance report for July.2. Which of the variances should be of concern to management? Explain
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
Planning Flexible Actual
Budget Budget Results
Flights (q) .................................................................. 50 48 48
Revenue ($320.00q) .................................................. $16,000 $15,360 $13,650
Expenses:
Wages and salaries ($4,000 $82.00q) ............... 8,100 7,936 8,430
Fuel ($23.00q) ....................................................... 1,150 1,104 1,260
Airport fees ($650 $38.00q) ............................... 2,550 2,474 2,350
Aircraft
Office expenses ($190 $2.00q) .......................... 290 286 460
Total expense ............................................................ 12,440 12,136 12,836
Net operating income ................................................ $ 3,560 $ 3,224 $ 814
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.
2. Which of the variances should be of concern to management? Explain
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