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 Planning Results Budget Variances Lessons 225 220 Revenue $ 60,400 $ 59,400 $1,000 F Expenses : Instructor wages 17,800 17,600 200 U Aircraft depreciation 7,650 7,480 170 V Puel 4,340 3,740 600 U Maintenance 3,650 3,450 200 V Ground facility expenses 2,470 2,530 60 Administration 3,960 4,040 BO Total expono 39,870 38,840 1,030 U Net operating income $ 20,530 $ 20,560 $ 30 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, TipTop Flight School Flexible Budget Performance Report For the Month Ended July 31 Actual Results Flexible Budget Planning Budget 220 Lessons 225 $ 60,400 $ 59,400 Revenue Expenses: Instructor wages Aircraft depreciation 17,800 Fuel 7,650 4,340 3,650 2,470 Maintenance Ground facility expenses Administration Total expense Net operating income 17,600 7,480 3,740 3,450 2,530 4,040 38,840 20,560 3,960 39,870 $ 20,530 $