On december 31, 2020, vaughn manufacturing granted some of its executives options to purchase 181000 shares of the company’s $10 par common stock at an option price of $50 per share. the black-scholes option pricing model determines total compensation expense to be $1353900. the options become exercisable on january 1, 2021, and represent compensation for executives’ services over a three-year period beginning january 1, 2021. at december 31, 2021 none of the executives had exercised their options. what is the impact on vaughn’s net income for the year ended december 31, 2021 as a result of this transaction under the fair value method?

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 flexible budget planning budget flights (q) 56 56 54 revenue ($350.00q) $ 16,500 $ 19,600 $ 18,900 expenses: wages and salaries ($3,300 + $91.00q) 8,354 8,396 8,214 fuel ($31.00q) 1,904 1,736 1,674 airport fees ($870 + $35.00q) 2,730 2,830 2,760 aircraft depreciation ($11.00q) 616 616 594 office expenses ($240 + $1.00q) 464 296 294 total expense 14,068 13,874 13,536 net operating income $ 2,432 $ 5,726 $ 5,364 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.