1. Explain why the company's April net profit was only about two-thirds of the expected level, despite several favourable variable expense variances shown in the above performance report.

2. Explain why the original performance/variance report prepared by the manager of Aircraft Operations is misleading.

BLO1105 - Business Law - Adobe Reader X File Edit View Window Help QDQE 2 / 4 + 125% Tools Sign Comment Sign In Export PDF Fantastic Sky Tours Pty Ltd Performance Report for the month of April 2020 Adobe ExportPDF Convert PDF files to Word or Excel online Select PDF File: Formula Actual Static "ITACC607 Individual Assignment(... flexible (32 000 budget Variance 1 file / 162 KB budget air-km) (35 000 Convert To: (per air-km) air-km) Microsoft Word (*.docx) Passenger revenue $3.50 $112 000 $122 500 $10 500 U Recognize Text in English (U.S.) Change Less Variable costs: Fuel 0.50 17 000 17 500 500 F Convert Aircraft maintenance 0.75 23 500 26 250 2 750 F Create PDF Flight crew salaries 0.40 13 100 14 000 900 F Send Files Selling and administration 0.80 24 900 28 000 3 100 F Store Files Total variable expenses $2.45 $ 78 500 $ 85 750 $ 7 250 F Contribution margin $1.05 $ 33 500 $ 36 750 $ 3 250 U Less Fixed costs: Depreciation on aircraft $2 900 2 900 $ 2 900 $ 0 Landing fees 900 1 000 900 100 U Supervisory salaries 9 000 8 600 9 000 400 F Selling and administrative 11 000 12 400 11 000 1 400 U Total fixed expenses $23 800 $ 24 900 $ 23 800 $ 1 100 U Net profit $ 8 600 $ 12 950 $ 4 350 U Activate Windows Go to Settings to activate Windows Type here to search O e Da W 3:01 PM 5/8/2020