Exercise 9-4 (Algo) Prepare a Flexible Budget Performance Report [LO9-4] 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 Actual Results 56 Flexible Planning Budget Budget 56 54 Flights (9) $ 16,400 $ 19,320 $ 18,630 Revenue ($345.009) Expenses: Wages and salaries ($3,700 + $88.009) Fuel ($33.009) Airport fees ($820 + $34.009) Aircraft depreciation ($8.009) Office expenses ($240 + $1.009) Total expense Net operating income 8,592 8,628 8,452 2,012 1,848 1,782 2,594 2,724 2,656 448 448 432 464 296 294 13,944 13, 616 $ 2,290 $ 5,376 $ 5,014 14, 110 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 that includes revenue and spending variances and activity variances. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.) Vulcan Flyovers Flexible Budget Performance Report For the Month Ended July 31 Flexible Budget Actual Results Planning Budget 54 Flights 56 56 $ 16,400 $ 19,320 $ 18.630 Revenue Expenses Wages and salaries Fuel 8,592 8,628 8,452 1,848 2,012 2,594 2,724 1,782 2,656 432 294 Airport fees Aircraft depreciation Office expenses Total expense Net operating income 448 448 464 296 13,944 14,110 13,616 $ 2.290 $ 5,376 $ 5,014 Problem 9-18 (Algo) Activity and Spending Variances [LO9-1, LO9-2, LO9-3] You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The president has asked that you review the company's costing system and "do what you can to help us get better control of our manufacturing overhead costs." You find that the company has never used a flexible budget, and you suggest that preparing such a budget would be an excellent first step in overhead planning and control. After much effort and analysis, you determined the following cost formulas and gathered the following actual cost data for March: Utilities Maintenance Supplies Indirect labor Depreciation Cost Formula $16, 600 + $0.18 per machine-hour $38,900 + $1.20 per machine-hour $0.50 per machine-hour $94,700 + $1.30 per machine-hour $68, 100 Actual Cost in March $ 21,460 $ 53,100 $ 8,300 $117,700 $ 69,800 During March, the company worked 15,000 machine-hours and produced 9,000 units. The company had originally planned to work 17,000 machine-hours during March. Required: 1. Calculate the activity variances for March. 2. Calculate the spending variances for March. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Calculate the activity variances for March. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.) FAB Corporation Activity Variances For the Month Ended March 31 Utilities Maintenance Supplies Indirect labor Depreciation Total Required 1 Required 2 Calculate the spending variances for March. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.) FAB Corporation Spending Variances For the Month Ended March 31 Utilities Maintenance Supplies Indirect labor Depreciation Total