Chapter #9 - Quiz i Saved Help Save & E 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 eBook Results Budget Variances Lessons 240 235 Revenue $ 55, 060 $ 54, 050 $ 1, 010 F Expenses : Instructor wages 11, 865 11, 750 115 U Aircraft depreciation 8, 400 8, 225 175 U Fuel 4, 840 4, 230 610 U Maintenance 4, 240 4, 125 115 U Ground facility expenses 2, 810 2 , 875 65 F Administration 4, 280 4, 340 60 F Total expense 36, 435 35, 545 890 U Net operating income $ 18, 625 $ 18,505 $ 120 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 $230q Instructor wages $50q Aircraft depreciation $35q Fuel $18q Maintenance $600 + $15q Ground facility expenses $1, 700 + $5q Administration $3, 400 + $4q Mc Graw Graw Hill 2 2 1 APR 1 tv