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 145 140 Revenue $ 33,110 $ 32,200 $ 910 F Expenses: Instructor wages 8,510 8,400 110 U Aircraft depreciation 4,350 4,200 150 U Fuel 2,470 1,960 510 U Maintenance 2,010 1,900 110 U Ground facility expenses 1,465 1,480 15 F Administration 3,265 3,340 75 F Total expense 22,070 21,280 790 U Net operating income $ 11,040 $ 10,920 $ 120 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	$230q
Instructor wages	$60q
Aircraft depreciation	$30q
Fuel	$14q
Maintenance	$500 + $10q
Ground facility expenses	$1,200 + $2q
Administration	$3,200 + $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.)

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 145 140 Lessons $33, 110 $32,200 $910 F Revenue Expenses: Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration Total expense Net operating income 8,510 8,400 110 U 4,350 4,200 150 U 2,470 1,960 510 U 2,010 1,900 110 U 1,465 1,480 15 F 3,265 3,340 75 F 22,070 21,280 790 U $11,040 $10,920 $ 120 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 $2304 Instructor wages $609 Aircraft depreciation $309 Fuel $149 Maintenance $500 + $109 Ground facility expenses $1,200 + $29 Administration $3,200 + $19 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 145 Flexible Budget Planning Budget 140 Lessons $ 33,110 S 32,200 $ 8,510 8,400 4,350 Revenue Expenses: Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration 2.470 4,200 1,960 1,900 1.480 2,010 1,465 3,265 22,070 $ 11,040 3,340 21.280 Total expense Net operating income S 10,920