189 TipTop Flight School offers flying lessons at a small municipal airport. The school's owner and manager has been attempting to evaluate performance and control costs using a variance report that compares the planning budget to actual results. A recent variance report appears below: TipTop Flight School Variance Report For the Month Ended July 31 Actual Planning Results Budget Variances Lessons 175 Revenue $ 41,290 $ 40,250 $1,040 F Expenses: Instructor wages 10,645 10,500 145 U Aircraft depreciation 6,840 6,650 198 U Fuel 3,090 2,450 640 U Maintenance 2,700 2,555 145 U Ground facility expenses 2,470 2,550 80 F Administration 3,885 3,985 100 F Total expense 29,630 26,696 940 U Net operating income $ 11,660 $ 11,560 $ 100 F After several months of using those reports, the owner has become frustrated. For example, she is quite confident that instructor wages were very tightly controlled in July, but the report shows an unfavorable variance The planning budget was developed using the following formulas where is the number of lessons sold: Cost Formulas Revenue $2309 Instructor wages 5600 Aircraft depreciation $389 Fuel $149 Maintenance $630 + $114 Ground facility expenses $1,850 + $49 Administration $3,468 + $39 Required: 2. Complete the flexible budget performance report for the school for July (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (ie, zero variance). Input all amounts as positive values.) Answer is complete but not entirely correct. TipTop Flight School Flexible Budget Performance Report For the Month Ended July 31 Actual Revenue and Flexible Activity Planning Results Spending Variances Budget Variances Budget 180 180 175 Lessons $ 41,290 S 110U S 41,400 $1,150 FS 40,250 Revenue Expenses Instructor wages Aircraft depreciation Fuel 155 F 0 None 10,645 6,840 3,090 2.700 2.470 3,885 29,630 $ 11,660 Maintenance Ground facility expenses Administration Total expense Net operating income (570) U (72) U 153 F 214 F (120) U 230 U 000000 10,800 300 U 6,840 190 U 2,520 70 U 2,628 73 U 2.623 73U 4,099 114 U 29,5103 820 X U $ 11,890 $ 330 F 10,500 6,650 2,450 2.555 2,550 3,985 28.690 S 11,560 $