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	$	36,030		$	35,000		$	1,030	F
Expenses:
Instructor wages		7,835			7,700			135	U
Aircraft depreciation		5,365			5,180			185	U
Fuel		3,430			2,800			630	U
Maintenance		3,135			3,000			135	U
Ground facility expenses		2,145			2,220			75	F
Administration		3,625			3,720			95	F
Total expense		25,535			24,620			915	U
Net operating income	$	10,495		$	10,380		$	115	F

After several months of using such variance 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	$250q
Instructor wages	$55q
Aircraft depreciation	$37q
Fuel	$20q
Maintenance	$620 + $17q
Ground facility expenses	$1,800 + $3q
Administration	$3,440 + $2q