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 Plight School Variance Report For the Month Ended July 31 Actual Planning Results Budget Variances Leon 185 180 Revenue $ 42,360 $441,400 9960 Expenses: Instructor wages 10,960 10,000 160 U Xiroraft depreciation 7,400 7.200 200 U Puel 3,620 3,060 560 U Maintenance 2,690 2,530 1600 Ground facility expenses 2,130 2,170 40 Administration 3.720 J.840 120/7 Total expense 30,520 29,600 Net operating income $ 11,040 511,00 $ 40 F 9200 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 based on the following information Variable costs and the varioble component of mixed costs) vary based on the number of lessons sold. (Hint: To get the variable component of the mixed cost, subtract the fixed amount from the total and divide by the number of units in the planning budget.) Revenge Instructor wages Aircraft depreciation Tuel Maintenance Ground facility variable variable Variable variable mixedt 55501 fixed mixed $1.450 Ground facility expenses Administration Total expense Net operating income 2,130 2,170 40 3,720 3,840 120 F 30,520 29,600 920 U $ 11,840 $ 11,800 $ 40. 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 based on the following information Variable costs and the variable component of mixed costs) vary based on the number of lessons sold. (Hint: To get the variable component of the mixed cost, subtract the fixed amount from the total and divide by the number of units in the planning budget.) Revenue Instructor wagen Aircraft depreciation Puel Maintenance Ground facility exponses Administration variable variable variable variable mixed: $550 is fixed mixed: $1,450 is fixed mixed: $3,300 fixed 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 (l.e., zero variance). Input all amounts as positive values.) TipTop Flight School Flexible Budget Performance Report For the Month Ended July 31 Actual Flexible Planning ALUI depreciation Puel Maintenance Ground facility expenses Administration Variable variable mixed: $550 is fixed mixedt $1,450 is fixed mixed: $3,300 is fixed 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 (l.e, zero variance). Input all amounts as positive values.) Tip Top Flight School Flexible Budget Performance Report For the Month Ended July 31 Actual Results Flexible Budget Planning Budget 180 Lessons 185 $ 42,360 $ 41,400 Revenue Expenses Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration Total expense Net operating income 10.950 7,400 3.620 2,690 2.130 3.720 30,520 $ 11,840 10,800 7.200 3,000 2,530 2.170 3.840 29,600 $ 11,800
