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: Lessons Revenue Expenses: Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration Total expense Net operating income TipTop Flight School Variance Report For the Month Ended July 31 Actual Results Planning Budget Variances 220 215 $ 59,130 $ 58,050 $ 1,080 F 17,385 17,200 185 U 7,260 7,095 165 U 4,550 3,870 680 U 4,080 3,895 185 U 2,895 2,910 15 F 4,025 4,185 160 F 40,195 39,155 1,040 U $ 18,935 $ 18,895 $ 40 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: Cost Formulas Revenue Instructor wages $2709 $809 Aircraft depreciation $339 Fuel $189 Maintenance $670 + $159 Ground facility expenses $2,050 + $49 Administration $3,540 + $39