TipTop Flight School offers flying lessons at a small municipal airport. The school's owner and manager...
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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 Resulta Planning Budget Variances Lessons Revenue 155 150 $33,900 $ 33,000 $900 F Expenses Instructor vages 9,870 9,750 120 U Aircraft depreciation 5,890 5,700 190 U Fuel 2,750 2,250 500 U Maintenance 2,450 2,330 120 U Ground facility expenses 1,540 1,550) 10 P Administration 3,320 3,390 70 P Total expense 25,920 24,970 850 U Net operating incone 38,000 $ 0.030 $50 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 vages Aircraft depreciation Cost Formulas $2200 $650 $384 $150 $530+ $120 Ground facility expenses $1,250 +$24 $3,240 $10 Tual 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 (.e., zero variance). Input all amounts as positive values.) 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 Resulta Planning Budget Variances Lessons Revenue 155 150 $33,900 $ 33,000 $900 F Expenses Instructor vages 9,870 9,750 120 U Aircraft depreciation 5,890 5,700 190 U Fuel 2,750 2,250 500 U Maintenance 2,450 2,330 120 U Ground facility expenses 1,540 1,550) 10 P Administration 3,320 3,390 70 P Total expense 25,920 24,970 850 U Net operating incone 38,000 $ 0.030 $50 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 vages Aircraft depreciation Cost Formulas $2200 $650 $384 $150 $530+ $120 Ground facility expenses $1,250 +$24 $3,240 $10 Tual 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 (.e., zero variance). Input all amounts as positive values.)
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