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

The company measures its activity in terms of flights. Customers can buy individual tickets for overflights or hire an entire plane for an overflight at a discount.

Required:

1.         Prepare a flexible budget performance report for July.

2.         Which of the variances should be of concern to management? Explain.

Transcribed Image Text:

Vulcan Flyovers Operating Data For the Month Ended July 31 Planning Flexible Actual Budget Budget Results 50 Flights (q) 48 48 S15360 $13650 Revenue($320.00g) $16,000 Expenses: Wages and salaries ($4,000 + $82.00q) 8,100 7936 8430 Fuel ($23.00q) 1,104 1260 1,150 2,550 2350 Airport fees ($650 + $38.00q) 2,474 Aircraft depreciation ($7.00g) 350 336 336 286 Office expenses ($190 + $2.00g) 290 460 Total expense 12,440 12,136 12836 $3,560 $3.224 Net operating income S814