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: TipTop Flight School Variance Report For the Month Ended July 31 Actual Planning Results Budget Variances Lessons 165 160 $35,390 34,400 $990 F Revenue Expenses Instructor wages 10,430 10,240 190 U Aircraft depreciation 5,940 5,760 180 U Fuel 3,630 3,200 430 U Maintenance 2,670 2,560 110 U Ground facility expenses 2,540 2,600 60 F Administration 4,275 4,340 65 F Total expense 29,485 28,700 785 U 5,905 5,700 205 F Net operating income 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 $215 Revenue Instructor wages $64 Aircraft depreciation $36 $20q Fuel Maintenance 640 $12 $1,640 $6q Ground facility expenses Administration $4,180 $19