2 Desert Flyovers offers scenic overflights of Death Valley in Eastern California. Data concerning the company's operations in July appear below: Desert Flyovers Budget For the Month Ended July 31 Planning Flexible Budget Budget Flights (9) 110 ? Revenue ($3409). ? ? Expenses: Wages & Salaries ($7,000 + $809) ? Fuel ($300) ? ? Airport fees ($2,000+ $359). ........ ? ? Aircraft depreciation ($109). ? ? Office expenses ($600 + $109). _? Net operating income........ $.2 $. ? The actual results for July were as follows: Flights (9) .90 Revenue $29,000 Variable Expenses $19,000 Fixed expenses $9,700 show 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 by using contribution format income statement. ( ) 2. Calculate the company's activity variance for revenue(20) 2 revenue variance (1), 3 spending variance for variable expense (1) and 4 spending variance for fixed expense ( ). 3. Which of the variances should be of concern to management? Explain