Lessons Revenue Expenses: Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration Total expense Net operating income TipTop Flight School Variance Report For the Month Ended July 31 Actual Results Planning Budget Variances 140 135 $ 33,420 $ 32,400 $ 1,020 F 6,875 6,750 125 U 5,040 4,860 180 U 3,185 2,565 620 U 2,895 2,770 125 U 1,950 2,020 70 F 3,465 3,555 90 F 23,410 22,520 890 U $ 10,010 $ 9,880 $ 130 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 Administration $2409 $509 $369 $199 $610 + $169 Ground facility expenses $1,750 + $2q $3,420 + $19