Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Problem 9-20 (Algo) Critique a Report; Prepare a Performance Report [L09-1, LOB-2, L09-3, L09-4] TipTop Flight School offers flying lessons at a small municipal airport.

image text in transcribedimage text in transcribed
Problem 9-20 (Algo) Critique a Report; Prepare a Performance Report [L09-1, LOB-2, L09-3, L09-4] 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 variance report appears below: TipTop Flight School Variance Report For the Month Ended July 31 Actual Planning Results Budget Variances Lessons 220 215 Revenue $ 59,130 $ 58,050 $ 1,080F Expenses: Instructor wages 17,335 17,200 185 U Aircraft depreciation 7,260 7,095 165 U Fuel 4,550 3,870 680 U Maintenance 4,080 3,895 185 U Ground facility expenses 2,395 2,910 15 F Administration 4,025 4,185 160 F Total expense 40,195 39,155 1,040 U Net operating income 5 18,935 $ 18,895 $ 40 F After several months of using these 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 q is the number of lessons sold: Cost Formulas Revenue $270q Instructor wages $80g Aircraft depreciation $33q Fuel $18g Maintenance $670 + $15q Ground facility expenses $2,050 + 54g Administration $3,540 + $3q 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.) Lessons Revenue Expenses: Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration Total expense Net operating income

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting

Authors: James D. Stice, Earl K. Stice, Fred Skousen

17th Edition

032459237X, 978-0324592375

More Books

Students also viewed these Accounting questions