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 Results Planning Budget Variances 140 135 $ 33,420 $ 32,400 $ 1,020 F 6,875 6,750 125 U 5,040 4,860 180 U 3,185 2,565 620 U 2,895 2,770 125 U 1,950 2,020 70 P 3,465 23,410 $ 10,010 3,555 22,520 $9,880 90 F 890 U $ 130 P 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 $240g $50g $36q $19q $610 $16q Ground facility expenses $1,750 +$2q