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:

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:

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).)

TipTop Flight School Variance Report For the Month Ended July 31 Actual Planning ResultsBudgetVariances 195 Lessons Revenue 190 $40,840$ 39,900 $940 F Expenses Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration 11.960 7,215 3,890 2,870 2,135 4,285 11,780 180 U 7,030 185 U 3.420 470 U 2,750 120 U 2,200 65 F 4,380 95 F Total expense 32,355 31,560 795 U Net operating income $ 8,485$ 8,340 $145 F