1 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 varlance report appears below: TipTop Flight School Variance Report For the Month Ended July 31 Actual Results 225 Planning Budget 220 Variances Lessons $ 62,690 561 600 $1,90 F 195 U Revenue Expensest Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration Total expense tlet operating Income 13,395 13,209 7,650 7.430 4,870 4,180 4,395 4,200 3,150 3,200 5.250 4.4.40 17,740 36.700 $ 24,950 $ 24,900 1700 690 195 U 20+ 190 1,100 U $ 50 F After several months of using such variance 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 qis the number of lessons sold Cost Forums Revenue $2809 Instructor was 5600 Aircraft depreciation $340 Fuel 5199 Maintenance $6805166 ME Prev 1 of 3 !!! Next > HI 1 After several months of using such variance 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 is the number of lessons sold: 00:58:17 Cost Formulas $2800 $60 Revenue Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration 5199 36.80 $164 $2,100 + $50 $3,560+ $49 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.) Tip Top Flight School Flexible Budget Performance Report For the Month Ended July 31 Actual Results 225 Flexible Budget Planning Budget 220 Lessons 62.690 $ 61,600 Revenue Expenses Instructor wages $ 13,395 13,200 MC Graw Hill Prey 1 of 3 !!! Next > 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.) 1 Tip Top Flight School Flexible Budget Performance Report For the Month Ended July 31 Actual Results 225 00:58:10 Flexible Budget Planning Budget 220 Lessons $ 62,690 $ 61,600 Revenue Expenses Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration Total expense Net operating income $ 13,395 7,850 4.870 4,395 3,180 4.250 37,740 $24.950 13 200 7480 4.180 4,200 3.200 4,440 36,700 $ 24,000 Draw 12 BER Next >
