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 varian report appears below. TipTop Flight School Variance Report For the Month Ended July 31 Actual Planning Lessons Revenue Results 240 Budget 235 Variances $ 55,060 $ 54,050 $1,010 P Expenses: Instructor wages 11,865 11,750 115 U Aircraft depreciation 8,400 8,225 175 U Fuel 4,840 4,230 610 U Maintenance 4,240 4,125 115 U Ground facility expenses 2,810 2,875 65 P Administration 4,280 4,340 Total expense Net operating income 36,435 $18,625 35,545 60 F 890 U $ 18,505 $ 120 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. s sold: The planning budget was developed using the following formulas, where q is the number of lessons s Cost Formulas Revenue $2304 Instructor vages $500 Aircraft depreciation $35g Fuel $18g Maintenance $600 +$15q Ground facility expenses. $1,700 + $5g Administration $3,400 +$4q Required: Lessons Revenue Expenses: TipTop Flight School Flexible Budget Performance Report For the Month Ended July 31 Revenue and Spending Variances Actual Results 240 $ 55,060 Flexible Activity Variances Budget Planning Budget 235 $ 54,050 Instructor wages 11,865 11,750 Aircraft depreciation 8,400 8,225 Fuel 4,840 4,230 Maintenance 4,240 4,125 Ground facility expenses 2,810 2,875 Administration 4,280 4,340 Total expense 36,435 35,545 Net operating income $ 18,625 $ 18,505