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: Variances $ 900 F TipTop Flight School Variance Report For the Month Ended July 31 Actual Planning Results Budget Lessons 155 150 Revenue $ 33, 900 $ 33,000 Expenses : Instructor wages 9,870 9,750 Aircraft depreciation 5,890 5,700 Fuel 2,750 2,250 Maintenance 2,450 2,330 Ground facility expenses 1,540 1,550 Administration 3, 320 3,390 Total expense 25,820 24,970 Net operating income $ 8,080 $ 8,030 120 U 190 U 500 U 120 U 10 F 70 F 850 U $ 50 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: Revenue Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration Cost Formulas $2209 $65 S389 $159 $530 + $129 $1,250 + $29 $3,240 + $19 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.) Tip Top Flight School Flexible Budget Performance Report For the Month Ended July 31 Actual Results Revenue and Spending Variances Flexible Budget Activity Variances Planning Budget 150 $ 33,000 155 Lessons Revenue 40,950 $ 40,950 $ 1,050 F $ 33,900 $ 1100 130 F 12,090 3100 9,870 5,890 9,750 5,700 0 0 2,750 2.250 Expenses: Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration Total expense Net operating income 2,330 2,450 1,540 1,550 3,320 3,390 25,820 $ 8,080 24,970 $ 8,030