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	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	U
Fuel	4,340	3,740	600	U
Maintenance	3,650	3,450	200	U
Ground facility expenses	2,470	2,530	60	F
Administration	3,960	4,040	80	F
Total expense	39,870	38,840	1,030	U
Net operating income	$ 20,530	$ 20,560	$ 30	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	$270q
Instructor wages	$80q
Aircraft depreciation	$34q
Fuel	$17q
Maintenance	$590 + $13q
Ground facility expenses	$1,650 + $4q
Administration	$3,380 + $3q

Required:

2.Complete the flexible budget performance report for the school for July.

Note: 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	Revenue and Spending Variances		Flexible Budget	Activity Variances		Planning Budget
Lessons	225			not attempted			220
Revenue	$60,400	not attempted	not attempted	not attempted	not attempted	not attempted	$59,400
Expenses:
Instructor wages	17,800	not attempted	not attempted	not attempted	not attempted	not attempted	17,600
Aircraft depreciation	7,650	not attempted	not attempted	not attempted	not attempted	not attempted	7,480
Fuel	4,340	not attempted	not attempted	not attempted	not attempted	not attempted	3,740
Maintenance	3,650	not attempted	not attempted	not attempted	not attempted	not attempted	3,450
Ground facility expenses	2,470	not attempted	not attempted	not attempted	not attempted	not attempted	2,530
Administration	3,960	not attempted	not attempted	not attempted	not attempted	not attempted	4,040
Total expense	39,870	not attempted	not attempted	not attempted	not attempted	not attempted	38,840
Net operating income	$20,530	not attempted	not attempted	not attempted	not attempted	not attempted	$20,560