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: pTop Flight School Variance Report For the Month Ended July 31 Actual Planning Budget Variances Lessons 165 160 Revenue $36,150 35,200 $950 F Instructor wages 10,580 10,400 180 U Arcraft depreciation Fuel 5,775 5,600 175 U 3,520 3,040 480 U Maintenance 3,040 2,900 140 U Ground facility expenses. 2,050 2.120 70 F Administration 4,290 4,340 50 F Total expense 29,255 28,400 855 U Net operating income s 6,895 s 6,800 s 95 F After several months of using such variance reports, the owner has become frustrated. example, she is For quite confident that instructor wages were very tghtly 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 $220q Instructor wages Aircraft depreciation $35q Fuel S19q Maintenance 660 $14 Ground facility expenses $1,640 $3a Administration $4,180 $1