Vulcan Flyovers offers scenic overflights of Mount St. Helens, the volcano in Washington State that explo sively erupted in 1982. Data concerning the company's operations in July appear below:

Yulcan Flyovers

Operating Data For the Month Ended July 31

1 . Prepare a Oexiblc budget performance report for July.

2. Which ofthe variances should be ofconcern to management? Explain.

prepare flexible budget in question 1st

Flexible Budget 48 $15,360 Actual Results 48 $13,650 Vulcan Flyovers Operating Data For the Month Ended July 31 Planning Budget Flights (q)......... 50 Revenue ($320.000)..... $ 16,000 Expenses: Wages and salaries ($4,000 + $82.009).. ........ 8,100 Fuel ($23.009) 1,150 Airport fees ($650 + $38.00) 2,550 Aircraft depreciation ($7.00q).... 350 Office expenses ($190 + $2.00q).... 290 Total expense. 12,440 Net operating income. $ 3,560 7,936 1.104 2,474 336 286 8,430 1,260 2,350 336 460 12,136 12,836 $ 3,224 $ 814