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TipTop Flight School offers flying lessons at a small municipal airport. The school's owner and manager attempted to evaluate performance and control costs using a variance report comparing 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 Lessons Revenue Expenses: Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration Total expenses Net operating income Planning Budget Variances 225 220 $ 60,400 $59,400 $1,000 F 17,800 17,600 200 U 7,650 7,480 170 U 4,340 3,740 600 U 3,650 3,450 200 U 2,470 2,530 60 F 3,960 4,040 80 F 39,870 38,840 1,030 U $ 20,530 $ 20,560 $ 30 F After several months of using these reports, the owner has become frustrated. For example, she is confident instructor wages were very tightly controlled in July, but the report shows an unfavorable variance. She developed the planning budget using the following formulas, where q is the number of lessons sold: Revenue Instructor wages Aircraft depreciation Cost Formulas $2709 $80q $34q $179 $590 + $139 Ground facility expenses $1,650 + $49 $3,380 + $3q Fuel Maintenance Administration Required: 2. Complete the flexible budget performance report for the school for July. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero

TipTop Flight School offers flying lessons at a small municipal airport. The school's owner and manager attempted to evaluate performance and control costs using a variance report comparing 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 Lessons Revenue Expenses: Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration Total expenses Net operating income Planning Budget Variances 225 220 $ 60,400 $59,400 $1,000 F 17,800 17,600 200 U 7,650 7,480 170 U 4,340 3,740 600 U 3,650 3,450 200 U 2,470 2,530 60 F 3,960 4,040 80 F 39,870 38,840 1,030 U $ 20,530 $ 20,560 $ 30 F After several months of using these reports, the owner has become frustrated. For example, she is confident instructor wages were very tightly controlled in July, but the report shows an unfavorable variance. She developed the planning budget using the following formulas, where q is the number of lessons sold: Revenue Instructor wages Aircraft depreciation Cost Formulas $2709 $80q $34q $179 $590 + $139 Ground facility expenses $1,650 + $49 $3,380 + $3q Fuel Maintenance Administration Required: 2. Complete the flexible budget performance report for the school for July. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter7: Variable Costing For Management analysis
Section: Chapter Questions
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TipTop Flight School offers flying lessons at a small municipal airport. The school's owner and manager attempted to evaluate performance and control costs using a variance report comparing the planning budget to actual results. A recent variance report appears below: Lessons Revenue Expenses: Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration Total expenses Net operating income TipTop Flight School Variance Report For the Month Ended July 31 Actual Results Planning Budget Variances 225 220 $ 60,400 $ 59,400 $ 1,000 F 17,800 17,600 200 U 7,650 7,480 170 U 4,340 3,740 600 U 3,650 3,450 200 U 2,470 2,530 60 F 3,960 4,040 80 F 39,870 38,840 1,030 U $ 20,530 $ 20,560 $ 30 F After several months of using these reports, the owner has become frustrated. For example, she is confident instructor wages were very tightly controlled in July, but the report shows an unfavorable variance. She developed the planning budget using the following formulas, where q is the number of lessons sold: Revenue Instructor wages Aircraft depreciation Cost Formulas $2709 $809 $349 $179 $590 + $13q Ground facility expenses $1,650 +$49 $3,380 +$39 Fuel Maintenance Administration Required: 2. Complete the flexible budget performance report for the school for July. Note: 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.
Transcribed Image Text:TipTop Flight School offers flying lessons at a small municipal airport. The school's owner and manager attempted to evaluate performance and control costs using a variance report comparing the planning budget to actual results. A recent variance report appears below: Lessons Revenue Expenses: Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration Total expenses Net operating income TipTop Flight School Variance Report For the Month Ended July 31 Actual Results Planning Budget Variances 225 220 $ 60,400 $ 59,400 $ 1,000 F 17,800 17,600 200 U 7,650 7,480 170 U 4,340 3,740 600 U 3,650 3,450 200 U 2,470 2,530 60 F 3,960 4,040 80 F 39,870 38,840 1,030 U $ 20,530 $ 20,560 $ 30 F After several months of using these reports, the owner has become frustrated. For example, she is confident instructor wages were very tightly controlled in July, but the report shows an unfavorable variance. She developed the planning budget using the following formulas, where q is the number of lessons sold: Revenue Instructor wages Aircraft depreciation Cost Formulas $2709 $809 $349 $179 $590 + $13q Ground facility expenses $1,650 +$49 $3,380 +$39 Fuel Maintenance Administration Required: 2. Complete the flexible budget performance report for the school for July. Note: 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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