hw 10.3

TipTop Flight School Variance Report For the Month Ended July 31
	Actual Results		Planning Budget		Variances
Lessons		175		170
Revenue	$	39,210	$	38,250	$	960	F
Expenses:
Instructor wages		11,060		10,880		180	U
Aircraft depreciation		6,475		6,290		185	U
Fuel		3,670		3,230		440	U
Maintenance		2,990		2,870		120	U
Ground facility expenses		2,225		2,300		75	F
Administration		4,305		4,370		65	F
Total expense		30,725		29,940		785	U
Net operating income	$	8,485	$	8,310	$	175	F

After several months of using such variance 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	$225q
Instructor wages	$64q
Aircraft depreciation	$37q
Fuel	$19q
Maintenance	$ 660 + $13q
Ground facility expenses	$1,620 + $4q
Administration	$4,200 + $1q

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 Revenue and Spending Variances Activity Variances Lessons Revenue Expenses Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration Total expense Net operating income