Passenger revenue Less: Variable expenses: Fuel 1; 1.?9 $ 68,633 $ 71,493 $ 2,833F Aircraft maintenance 2.33 84,?33 96,633 11,933F Flight crew salaries 1.13 42,633 46,233 3,633F Selling and ad-inistrative 2.83 135,233 117,633 12,433F Total variable expenses $ ?.93 $331,133 $331,833 $33,?33F Contribution margin 5 4-19 $154,939 $172,239 51?,399U Less: Fixed expenses: Per Month Depreciation on aircraft $ 13,333 $ 13,333 $ 13,333 $ 3 Landing 'Fees 4,333 4,?33 4,333 433U Supervisory salaries 43,333 38,833 43,333 1,233F Selling and ad-inistrative 49,333 54,833 49,333 5,833U Total 'Fixed expenses $133,633 $138,633 $133,633 $ 5,333U Operating inco-e $ 46,333 $ 68,633 $22,333u Required: 1. Prepare a columnar flexible budget for Flaming Foliage Sky Tours' expenses, using air miles as the cost driver at the following activity levels: 38,000 air miles, 42,000 air miles, and 45,000 air miles. 2. In spite of several favorable expense variances shown on the report above, the company's September operating income was only about twoethirds of the expected level. Identify some ofthe possible reasons. 4. Prepare a revised expense variance report for September, which is based on the flexible budget prepared in part {1}. 5. Jacqueline Frost presented the revised expense report to Leif along with the memo explaining why the original performance report was misleading. Leifdid not take it well. He complained of Frost's \"interference" and pointed out that the company had been doingjust fine without her. \"I'm taking my report to the owner tomorrow." Leif insisted. \"Yoursjust makes us look bad." What are Frost's ethical obligations in this matter? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 4 Required 5 Prepare a columnar flexible budget for Flaming Foliage Sky Tours' expenses, using air miles as the cost driver at the following activity levels: 38,000 air miles, 42,000 air miles, and 45,000 air miles. Total variable expenses Fixed expenses: Total xed expenses Total expenses Required 2 > Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 4 Required 5 In spite of several favorable expense variances shown on the report above, the company's September operating income was only about twothirds of the expected level. Identify some of the possible reasons. (Select which of the following statements (is) are true by selecting an "X".) "he variance report is misleading because the activity levels used for the comparison differ. 'here is a large unfavorable variance in passenger revenue. Favorable expense variances have no impact on operating income. "here are unfavorable variances in xed expenses. ( Required1 Required4 > Requiredl RequiredZ i Required4 E RequiredS ' Prepare a revised expense variance report for September, which is based on the flexible budget prepared in part (1). (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "0" for no effect (i.e., zero variance). Round "per air mile" answers to 2 decimal places.) Variablemp __ Total variable expenses Fixed expenses: Per Month Total xed expenses Total expenses