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 Lessons Revenue Expenses: Instructor wages Aircraft depreciation Fuel Maintenance Administration Ground facility expenses Net operating income Total expense Actual Planning Results 180 Budget Variances $ 41,290 175 $ 40,250 $ 1,040 F 10,645 10,500. 145 U 6,840 6,650 190 U 3,090 2,450. 640 U 2,700 2,555 145U 2,470 2,550 80 F 3,885 29,630 $ 11,660 3,985 28,690 100 F 940 U $ 11,560 $ 100 F After several months of using these 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: After several months of using these 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 Instructor wages Aircraft depreciation Fuel Maintenance $230q $609 $38q $149 $630 +$119 Ground facility expenses. Administration $1,850 + $4q $3,460 + $3q 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.) Lessons Revenue Expenses: Flexible Budget Performance Report For the Month Ended July 31 Revenue and Spending Variances. Actual Results 180 $ 41,290 Flexible Activity Variances Planning Budget Budget 175 $ 40,250 Instructor wages 10,645 Aircraft depreciation 6,840 Fuel 3,090 Maintenance 2,700 Ground facility expenses 2,470 Administration 3,885 10,500 6,650 2,450 2,555 2,550 3,985 Total expense 29,630 28,690 Net operating income $ 11,660 $ 11,560