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 Administration Ground facility expenses Net operating income Total expense Actual Results 200 $ 49,810 Planning Budget 195 $48,750 Variances $ 1,060 P 13,815 13,650 165 U 8,000 7,800 200 U 3,780 3,120 660 U 3,350 3,185 165 U 2,250 2,340 90 F 3,575 34,770 $ 15,040 3,695 33,790 $14,960 120 F 980 U $ 80 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 $250g Instructor wages $70g Aircraft depreciation $40g Fuel $169 Maintenance $650 +$13q Ground facility expenses $1,950 + $2q Administration $3,500 +$1