Prepare a flexible budget performance report for july

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Reference no: EM13170338

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:

Vulcan Flyovers Operating Data For the Month Ended July 31
	Planning Budget	Flexible Budget	Actual Results
Flights (q)	50	48	48
Revenue ($320.00q)	$16,000	$15,360	$13,650
Expenses:
Wages and salaries ($4,000 + $82.00q)	8,100	7,936	8,430
Fuel ($23.00q)	1,150	1,104	1,260
Airport fees ($650 + $38.00q)	2,550	2,474	2,350
Aircraft depreciation ($7.00q)	350	336	336
Office expenses ($190 + $2.00q)	290	286	460
Total expense	12,440	12,136	12,836
Net operating income	$3,560	$3,224	$814

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.

1) Prepare a flexible budget performance report for July

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

Reference no: EM13170338

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