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 Budget Variances 220 215 $ 56,890 $ 55,900 $ 990 F 16,315 16,125 190 U 7,260 7,095 165 U 4,030 3,440 590 U 3,780 3,590 190 U 2,190 2,245 55 F 3,675 3,790 115 F 37,250 36,285 965 U $ 19,640 $ 19,615 $ 25 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: Revenue Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses. Administration Cost Formulas $2600 $750 $33q $169 $580 +$140 $1,600 +$30 $3,360 +$20