6 3 points eBook Problem 9-20 (Algo) Critique a Report; Prepare a Performance Report [LO9-1, LO9-2, LO9-3, L09-4] 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 Lessons Print Revenue Expenses: Instructor wages References Aircraft depreciation Fuel Maintenance Ground facility expenses Administration Total expense Net operating income Actual Results Planning Budget Variances 230 225 $ 66,350 $ 65,250 $ 1,100 F 14,830 14,625 205 U 8,050 7,875 175 U 5,200 4,500 700 U 4,720 4,515 205 U 3,025 3,050 25 F 4,175 4,255 80 F 40,000 38,820 1,180 U $ 26,350 $ 26,430 $ 80 F 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 q is the number of lessons sold: Cost Formulas Revenue Instructor wages Aircraft depreciation Fuel Maintenance $2909 $65q $35q $209 $690 +$17q Ground facility expenses Administration $2,150 + $4q $3,580 + $39 Required: 2.Complete the flexible budget performance report for the school for July. Note: Indicate the effect of each varlance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (l.e., zero varlance). Input all amounts as positive values. 6 The planning budget was developed using the following formulas, where q is the number of lessons sold: Cost Formulas 3 points Fuel Revenue Instructor wages Aircraft depreciation Maintenance $2909 $65q $35q $209 $690 + $17q Ground facility expenses Administration $2,150 + $4q $3,580 + $39 eBook Required: Print References 2.Complete the flexible budget performance report for the school for July. Note: Indicate the effect of each varlance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (I.e., zero varlance). Input all amounts as positive values. Lessons Revenue TipTop Flight School Flexible Budget Performance Report For the Month Ended July 31 Actual Results Flexible Budget Planning Budget 230 225 $ 66,350 $ 65,250 Expenses: Instructor wages 14,830 14,625 Aircraft depreciation 8,050 7,875 Fuel 5,200 4,500 Maintenance 4,720 4,515 Ground facility expenses 3,025 3,050 Administration 4,175 4,255 Total expense 40,000 38,820 Net operating income $ 26,350 $ 26,430