At Disney World in Orlando, Florida there is an outdoor camping facility called Fort Wilderness. The Fort sits on a 10,000 wooded-acre site. Disney offers scenic tours around Fort Wilderness using Disney characters. Data for the Fort Wilderness operation appear below: Disney World Amusement Park, Inc. Fort Wilderness Outdoor Facility For the month ended August 31

Actual Flexible Planning Results Budget Budget Scenic Tours (q).50..5545 Revenue ($100q)....$15,000.$16,200....$14,500 Expenses: Wages & Salaries ($2,000+$50q).$7,000$7,800..$6,000 Gasoline & Oil ($20q).2,000..2,200...1,800 Theme Park Tickets ($300+$15q)..1,800..2,4001,200 Guest Bus Depreciation ($10)1,000..1,400...800 Administrative Expenses ($200+$4q)....400.400..300 Total Expenses.$12,200..$14,200...$10,100 Net Operating Income...$2,800$2,000......$4,400 The company measures its activity in terms of scenic tours. Tickets for the scenic tours can be purchased individually, or at a group discount for groups, clubs, etc. Required: 1. Utilizing the format covered in Ch.9, prepare a flexible budget report for August that includes revenue and spending variances and activity variances. (18 points) 2. Which of the variances should be of concern to management? Explain. (2 points)