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ACC EXERCISE 9?4 Mt. Hood Air

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Question;EXERCISE 9?4 Prepare a Flexible Budget Performance Report [LO4]Mt. Hood Air offers scenic overflights of Mt. Hood and the Columbia River gorge. Data concerningthe company?s operations in August appear below:Mt. Hood AirOperating DataFor the Month Ended August 31PlanningBudgetFlexibleBudgetActualResultsFlights (q)............................... 50 52 52Revenue ($360.00q)....................... $18,000 $18,720 $16,980Expenses:Wages and salaries ($3,800 + $92.00q)..... 8,400 8,584 8,540Fuel ($34.00q).......................... 1,700 1,768 1,930Airport fees ($870 + $35.00q)............. 2,620 2,690 2,690Aircraft depreciation ($11.00q).............. 550 572 572Office expenses ($230 + $1.00q)........... 280 282 450Total expense............................ 13,550 13,896 14,182Net operating income...................... $ 4,450 $ 4,824 $ 2,798The company measures its activity in terms of flights. Customers can buy individual tickets foroverflights or hire an entire plane for an overflight at a discount.Required:1. Prepare a flexible budget performance report for August.2. Which of the variances should be of concern to management? Explain.

 

Paper#42226 | Written in 18-Jul-2015

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