TipTop Flight School offers fiying 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: Tip Top Flight School Variance Report For the Month Ended July 31 Actual Results 165 Planning Budget 160 Variances Lessons Revenue Expenses $ 35,400 $ 34,400 1,000 F Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration 10,250 6,435 3,520 2,690 2,500 4,240 10,080 6,240 3,040 2,570 2,580 4,340 170 U 195 U 480 U 120 U 80 F 100 F 785 U $ 5,550 215 F Total expense Net operating income $5,765 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 Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration $215q $63q $39q $ 650 + $12q $1,620 $6q $4,180 $1