TipTop Flight School offers flying lessons at a small municipal airport. The schools 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 145 140 Revenue $ 33,110 $ 32,200 $ 910 F Expenses: Instructor wages 8,510 8,400 110 U Aircraft depreciation 4,350 4,200 150 U Fuel 2,470 1,960 510 U Maintenance 2,010 1,900 110 U Ground facility expenses 1,465 1,480 15 F Administration 3,265 3,340 75 F Total expense 22,070 21,280 790 U Net operating income $ 11,040 $ 10,920 $ 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. The planning budget was developed using the following formulas, where q is the number of lessons sold: Cost Formulas Revenue $230q Instructor wages $60q Aircraft depreciation $30q Fuel $14q Maintenance $500 + $10q Ground facility expenses $1,200 + $2q Administration $3,200 + $1q