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		195		190
Revenue	$	39,940	$	38,950	$	990	F
Expenses:
Instructor wages		11,950		11,780		170	U
Aircraft depreciation		7,215		7,030		185	U
Fuel		3,830		3,420		410	U
Maintenance		3,040		2,940		100	U
Ground facility expenses		2,100		2,180		80	F
Administration		4,280		4,370		90	F
Total expense		32,415		31,720		695	U
Net operating income	$	7,525	$	7,230	$	295	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	$205q
Instructor wages	$62q
Aircraft depreciation	$37q
Fuel	$18q
Maintenance	$ 660 + $12q
Ground facility expenses	$1,610 + $3q
Administration	$4,180 + $1q

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.)

Required: 2. Complete t the flexible budget performance repont for the of each variance by selecting "F"for schooor July. (lndicate the effect vorable, "U" for unfavorable, and "None" for no effectie., zero variance). Input all amounts as positive values.) Flexible Budget Performance Re For the Month Ended July 31 Revenue and Spending port Activity Variances Lessons Revenue Expenses nstructor vages Aircraft depreciation Fuel Ground faciliny exp Administration Total expense Net operating income