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 Ground facility expenses Administration Total expense Net operating income Actual Planning Results 145 Budget 140 Variances $36,030 $35,000 $1,030 F 7,835 7,700 135 U 5,365 5,180 185 U 3,430 2,800 630 U 3,135 3,000 135 U 2,145 2,220 75 F 3,625 3,720 95 F 25,535 24,620 915 U $ 10,495 $10,380 $ 115 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 based on the following information. Variable costs (and the variable component of mixed costs) vary based on the number of lessons sold. (Hint: To get the variable component of the mixed cost, subtract the fixed amount from the total and divide by the number of units in the planning budget.) Davana Ausrishla 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 based on the following information. Variable costs (and the variable component of mixed costs) vary based on the number of lessons sold. (Hint: To get the variable component of the mixed cost, subtract the fixed amount from the total and divide by the number of units in the planning budget) Revenue Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration variable variable variable variable mixed: $620 is fixed mixed: $1,800 is fixed mixed: $3,440 is fixed 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 TipTop Flight School Answer is not complete. Flexible Budget Performance Report For the Month Ended July 31 Actual Revenue and Results Spending Variances Flexible Budget Activity Variances Planning Budget 145 140 Revenue $36,030 $ 220U $ 36,250 $1,250 F $ 35,000 Expenses Instructor wages 7,835 140 F 7,975 275 U 7,700 Aircraft depreciation 5,365 0 None 5,365 185 UO 5,180 Fuel 3,430 530 U 2.900 100 UO 2,800 Maintenance 3,135 50 U 3,085 85 U 3,000 Ground facility expenses 2,145 90 F 2,235 15 U 2,220 Administration 3,625 95 F 3,720 -U 3,720 Total expense 25,535 255 U 25,280 660 U 24,620 Net operating income $ 10,495 S 475 U $ 10,970 S 590 F $ 10,380