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 31Actual

ResultsPlanning

BudgetVariancesLessons210205Revenue$54,370$53,300$1,070FExpenses:Instructor wages15,55015,375175UAircraft depreciation6,7206,560160UFuel4,1553,485670UMaintenance3,7053,530175UGround facility expenses2,6052,61510FAdministration3,7903,930140FTotal expense36,52535,4951,030UNet operating income$17,845$17,805$40F

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, whereqis the number of lessons sold:

Cost FormulasRevenue$260qInstructor wages$75qAircraft depreciation$32qFuel$17qMaintenance$660 + $14qGround facility expenses$2,000 + $3qAdministration$3,520 + $2q

Required:

2.Complete the actual results, flexible budget and planning budget performance report for the school for July.(Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)