question 2

TipTop Flight School offers flying lessons at a small municipal airport. The school's owner and manager has been attempting to evolute performance and control costs using a variance report that compares the planning budget to actual results. A recent variance report appears below: TipTop Flight Bhool Variance Report For the Month Ended July 31 Actual Planning Resulta Budget 220 215 Variances Lessons $ 59,130 $ 58,050 $1,080 P Revenue Expenses Instructor wages Aireraft depreciation Puel Maintenance Ground facility expenses Adacinistration Total expense Net operating Income 17,385 17,200 185 U 7,260 7,095 165 U 4,550 3,870 6800 4.080 3,895 185 2,895 2,910 15 4.025 4,185 160 40, 195 39, 155 1,040 U $ 18,935 $ 18,895 $ 40P 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 is the number of lessons sold: Revenue Instructor wages Aircraft depreciation Puel Maintenance Ground facility expenses Administration Cost Formulas $2700 $80g $339 $189 $670 + $150 $2,050 + $40 $3,540 $30 Required: > Complete the flovihla hurot nerformanra rannet for the erhaal for Indirate the effort of asch warianrahu calartinn eine Aircraft depreciation Puel Maintenance Ground facility expenses Administration $339 $180 $670 + $150 $2,050 - $49 $3,540 $39 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 Actual Results 220 Flexible Budget Planning Budget 215 Lessons $ 59,130 $ 58,050 17,200 Revenue Expenses: Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration Total expense Net operating income 17,385 7.260 4,550 4,080 2,895 4,025 40,195 $ 18,935 7,095 3,870 3,895 2,910 4,185 39,155 $ 4,895