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 180 175 Variances Lessons $ 41,290 $ 40,250 $1,040 F Revenue Expenses: Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration Total expense Net operating income 10,645 10,500 6,840 6,650 3,090 2,450 2,700 2,555 2,470 2,550 3,885 3,985 29.639 28,690 $ 11,660 $ 11,560 $ 145 190.0 640 U 145 0 BOY 100 P 940 0 100 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 is the number of lessons sold: Cost Formulas $2304 $604 Aircraft depreciation $389 Puel $630 - $119 Ground facility expenses Revenue Instructor wages $149 Maintenance $1,850 - $40 $3,460 - $10 Administration 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 180 Flexible Budget Planning Budget 175 Lessons $ 41,290 $ 40,250 Revenue Expenses: Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration Total expense Net operating income 10,645 6,840 3,090 2,700 2.470 3.885 29,630 $ 11,660 10,500 6,650 2,450 2,555 2,550 3,985 28,690 11,560 $