Vulcan Flyovers offer scenic overflight of Mount St. Helens, the volcano in Washington State that explosively erupted in 1982. Data concerning the companys operation in July appear below:

Vulcan Flyovers
Operating Data
For the Month Ended July 31
	Actual Results	Flexible Budget	Planning Budget
Flights (q)	48	48	50
Revenue ($320.00q)	$13,850	$15,360	$16,000
Expenses:
Wages and salaries($4,000 + $82.00q)	8.530	7,936	8,100
Fuel ($23.00q)	1,260	1,104	1,150
Airport fees ($650 + $38.00q)	2,350	2,474	2,550
Aircraft depreciation ($7.00q)	360	336	350
Office expenses ($190 + $2.00q)	460	286	290
Total expenses	12,960	12,136	12,440
Net operating income	$890	$3,224	$3,560

The company measures its activity in terms of flight. Customers can buy individual tickets for overflights or hire an entire plan an overflight at a discount.

Required: (a) Prepare a flexible budget performance report for July.

(b) Which of the variance should be of concern of management? Explain.