Problem 9-22 Critique a Report; Prepare a Performance Report [LO9-1, LO9-2, LO9-3, LO9-4, LO9-6] 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 Results Planning Budget Variances Lessons 185 180 $42,360 $ 41,400 $ 960 F Revenue Expenses: Instructor wages 160 U 10,960 7,400 3,620 2,690 2,130 3,720 10,800 7,200 3,060 2,530 2,170 3,840 29,600 Aircraft depreciation 200 U Fuel 560 U Maintenance 160 U Ground facility expenses 40 F Administration 120 F Total expense 30,520 920 U 11,840 $ 11,800 $ Net operating income 40 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: The planning budget was developed using the following formulas, where q is the number of lessons sold: Cost Formulas $230q $60q $40q $17q $550 $11q $1,450$4q $3,300$3q Revenue Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration 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.) Tip Top Flight School Flexible Budget Performance Report For the Month Ended July 31 Actual Flexible Planning Budget Results Budget Lessons 185 180 $ 41,400 Revenue 42,360 Expenses: $ 10,960 Instructor wages 10,800 Aircraft depreciation 7,400 7,200 Fuel 3,620 3,060 Maintenance 2,690 2,530 Ground facility expenses 2,170 2,130 Administration 3,720 3,840 30,520 Total expense 29,600 $ 11,840 Net operating income $ 11,800