Vulcan flyovers offers scenic overflights of mount st

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Reference no: EM13376774

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: EM13376774

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