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: ints Variances eBook $ 990 F TipTop Flight School Variance Report For the Month Ended July 31 Actual Planning Results Budget Lessons 220 215 Revenue $ 56,899 $ 55,900 Expenses: Instructor wages 16,315 16,125 Aircraft depreciation 7,260 7,995 Fuel 4,030 3,440 Maintenance 3,780 3,590 Ground facility expenses 2,190 2,245 Administration 3,675 3,790 Total expense 37,258 36,285 Net operating income $ 19,640 $19,615 Print 190 U 165 U 590 U 190 U 55 F 115 F 965 U $ 25 F References 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 Revenue $2689 Instructor wages $759 Aircraft depreciation $339 Fuel $169 Maintenance $580 + $140 Ground facility expenses $1,600 + $39 Administration $3,368 + $29 ok TipTop Flight School Flexible Budget Performance Report For the Month Ended July 31 Actual Flexible Results Budget 220 $ 56,890 Lessons Planning Budget 215 $ 55,900 Revenue nces 16,315 16,125 F 7,260 7,095 None 3,440 Expenses Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration Total expense Net operating income U 3,590 2,245 4,030 3.780 2,190 3,675 37,250 $ 19,640 3,790 36,285 19,615 $