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 165 160 Lessons ence Revenue $40,930 $40,000 $930 F Expenses: Instructor wages 11,330 11,200 130 U Aircraft depreciation 5,610 5,440 170 U Fuel 2,450 1,920 530 U Maintenance 2,090 1,960 130 U Ground facility 1,915 1,940 25 F expenses Administration 3,635 3,720 85 F Total expense 27,030 26,180 850 U Net operating income $13,900 $13,820 $ 80 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: Revenue Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration Cost Formulas $2509 $709 $349 $129 $520 + $99 $1,300 + $49 $3,240 + $39 date the effect of each varlance by 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 Flexible Results Budget 165 Planning Budget 160 Lessons Revenue $ 40,930 $40,000 Expenses: Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration Total expense Net operating income 11,330 5,610 2,450 2,090 1,915 11,200 5,440 1.920 1,960 1,940 3,635 27.030 3,720 26,180 $13,820 13,900 Next