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Q2 TipTop Flight School offers flying lessons at a small municipal airport. The schools owner and manager has been attempting to evaluate performance and control

Q2 TipTop Flight School offers flying lessons at a small municipal airport. The schools 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 220 215
Revenue $ 59,130 $ 58,050 $ 1,080 F
Expenses:
Instructor wages 17,385 17,200 185 U
Aircraft depreciation 7,260 7,095 165 U
Fuel 4,550 3,870 680 U
Maintenance 4,080 3,895 185 U
Ground facility expenses 2,895 2,910 15 F
Administration 4,025 4,185 160 F
Total expense 40,195 39,155 1,040 U
Net operating income $ 18,935 $ 18,895 $ 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:

Cost Formulas
Revenue $270q
Instructor wages $80q
Aircraft depreciation $33q
Fuel $18q
Maintenance $670 + $15q
Ground facility expenses $2,050 + $4q
Administration $3,540 + $3q

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.)

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