Desert Flyovers offers scenic overflights of Death Valley in Eastern California. Data concerning the company's operations in July appear below: Desert Flyovers Budget For the Month Ended July 31 Flights (q) Revenue ($340q).. Expenses: Wages & Salaries ($7,000+ $80q) Fuel ($30q). Airport fees ($2,000+ $35q). Aircraft depreciation ($10q).. Office expenses ($600 + $10q).. Net operating income... The actual results for July were as follows: Flights (q) Revenue Variable Expenses Fixed expenses ..90 $29,000 $19,000 $9,700 Planning Flexible Budget Budget 110 ? 2 2 ? ? ? ? ? _? ? $2 $? 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 by using contribution format income statement. ( ) 2. Calculate the company's activity variance for revenue(1), 2 revenue variance (1), 3 spending variance for variable expense (lol) and 4 spending variance for fixed expense ( ). 3. Which of the variances should be of concern to management? Explain.