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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

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
Actual Results Planning Budget Variances
Lessons 225 220
Revenue $ 62,690 $ 61,600 $ 1,090 F
Expenses:
Instructor wages 13,395 13,200 195 U
Aircraft depreciation 7,650 7,480 170 U
Fuel 4,870 4,180 690 U
Maintenance 4,395 4,200 195 U
Ground facility expenses 3,180 3,200 20 F
Administration 4,250 4,440 190 F
Total expense 37,740 36,700 1,100 U
Net operating income $ 24,950 $ 24,900 $ 50 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, whereqis the number of lessons sold:

Cost Formulas
Revenue $280q
Instructor wages $60q
Aircraft depreciation $34q
Fuel $19q
Maintenance $680 + $16q
Ground facility expenses $2,100 + $5q
Administration $3,560 + $4q

Required:

2.Complete the flexible 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.)

TipTop Flight School
Flexible Budget Performance Report
For the Month Ended July 31
Actual Results Flexible Budget Planning Budget
Lessons 225 220
Revenue $62,690 $61,600
Expenses:
Instructor wages 13,395 13,200
Aircraft depreciation 7,650 7,480
Fuel 4,870 4,180
Maintenance 4,395 4,200
Ground facility expenses 3,180 3,200
Administration 4,250 4,440
Total expense 37,740 36,700
Net operating income $24,950 $24,900

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