5,440 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 165 160 Revenue $ 40,930 $ 40,000 $ 930 F Expenses: Instructor wages 11,330 11,200 130 U Aircraft depreciation 5,610 170 U Fuel 2,450 1,920 530 U Maintenance 2,090 1,950 130 U Ground facility expenses 1,915 1,940 25 F Administration 3,635 3,720 Total expense 27.030 26.100 8S0U Net operating income $ 13,900 $ 13,820 After several months of using these 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 $2509 Instructor wages $704 Aircraft depreciation $340 Fuel $120 Maintenance 5520 + $99 Ground facility expenses $1,300 540 Administration $3,240 + $34 85 F $ BO 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 (i.e., zero variance), Input all amounts as positive values.) TipTop Flight School Flexible Budget Performance Report For the Month Ended July 31 Actual Flexible Results Budget 165 $ 40,930 Planning Budget 160 $ 40,000 11.200 Lessons Revenue Expono Instructor wages Arcraft depreciation Fuel Maintenance Ground facility expenses Administration Total expenso Net operating income 11,330 5,610 2.450 2,090 1,915 3,635 27.030 $ 13,900 5.440 1.920 1,960 1.940 3.720 26.180 $ 13,820