Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribedimage text in transcribed

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 Results Lessons Revenue Expenses: Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration Total expense Net operating income Planning Budget Variances 180 175 $ 41,290 $ 40,250 $ 1,040 F 10,645 10,500 145 U 6,840 6,650 190 U 3,090 2,450 640 U 2,700 2,555 145 U 2,470 2,550 80 F 3,885 3,985 100 F 29,630 28,690 940 U $ 11,660 $ 11,560 $ 100 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 Revenue Instructor wages Aircraft depreciation Cost Formulas $230q $689 $38q $140 $630 $11q Ground facility expenses $1,850 +$49 $3,460 +$30 Fuel Maintenance Administration 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.)

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

Step: 3

blur-text-image

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

Accounting Information Systems

Authors: Ulric J. Gelinas, Richard B. Dull

10th edition

9781305176218, 113393594X, 1305176219, 978-1133935940

More Books

Students also viewed these Accounting questions

Question

How are accounts prepared when contract lasts for more than a year?

Answered: 1 week ago

Question

What do you mean by notional profit?

Answered: 1 week ago

Question

What are the main features of cost-plus contract?

Answered: 1 week ago