Saved 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: Lessons Revenue Expenses Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expense Administration Total expense Operating income TIPTOP FLIGHT SCHOOL Variance Report For the Month Ended July 31 Actual Static Results Budget Variance 155 $33,900 150 $33,000 $900 F $ 9,870 $ 9,750 $120 U 5,890 5,700 190 U 2,750 2,250 1500 u 2,450 2,3301 120 U 1,540. 1,550 10 F 3,320 3,390 70 F 25,820 24,970 850 U $ 8,080 $ 8,030 $50 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 unfavourable variance. The static budget was developed using the following formulas, where q is the number of lessons sold: Revenue Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expense Administration Cost Formulas 2200 $ 650 $ 38q $ 15q $ 530 +$120 $1,250 $20 $ 3,240 $10 Next