TipTop Flight School offers ying 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 Lessons 155 158 Revenue $ 33,988 $ 33,668 $ 988 F Expenses: Instructor wages 9,3?8 9,?58 128 U Aircraft depreciation 5,398 5,768 198 U Fuel 2,?58 2,258 588 U Maintenance 2,458 2,338 128 U Ground facility expenses 1,548 1,558 18 F Administ ration 3 , 328 3, 398 78 F Total expense 25,328 24,978 858 U Net operating income '5 3.933 $ 5.1933 5 5'3 F ' After several months of using these reports. the owner has become frustrated. For example. she is quite condent 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 $22047 Instructor wages $65q Aircraft depreciation $3Eq Fuel $15q Maintenance $538 + $12.1- Ground facilityr expenses $1,256 + $2.1 Administration $3,246 + $1.1 | Required: 2. Complete the exible 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: 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 Planning Results Budget 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