Solution-Complete the flexible budget performance report

Complete the flexible budget performance report for the

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Reference no: EM13987232

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		Planning Budget		Variances
Lessons		195		190
Revenue	$	39,920	$	38,950	$	970	F

Expenses:
Instructor wages		11,950		11,780		170	U
Aircraft depreciation		7,605		7,410		195	U
Fuel		4,060		3,610		450	U
Maintenance		3,420		3,300		120	U
Ground facility expenses		1,935		2,000		65	F
Administration		4,330		4,390		60	F

Total expense		33,300		32,490		810	U

Net operating income	$	6,620	$	6,460	$	160	F

After several months of using such variance 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 qis the number of lessons sold:

	Cost Formulas
Revenue	$205q
Instructor wages	$62q
Aircraft depreciation	$39q
Fuel	$19q
Maintenance	$ 640 + $14q
Ground facility expenses	$1,620 + $2q
Administration	$4,200 + $1q

Required:

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).)

Reference no: EM13987232

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Complete the flexible budget performance report for the

Reference no: EM13987232

Reference no: EM13987232

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