PROBLEM 10-21 Critique a Report; Prepare a Performance Report LO 10-1, LO 10-4, LO 10-6 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: TipTop Flight School Variance Report For the Month Ended July 31 Actual Planning Results Budget Variances 150 Lessons Revenue Expenses: 155 ....$33,900 $33000 $900 F Instructor wages. Alrcraft depreclation . Fuel. Malntenance Ground facility expenses. Administration 9.750 5,700 2.250 2,450 2,330 1,540 1,550 3,320 3,390 9,870 5,890 2,750 120 U 190 U 500 U 120 U 10 F 70 F 850 U ....25,820 Net operating Income 8,080 8,030 50 F After several months of using such variance reports, the owner has become frustrated. For example, she is quite confident that instructor wages were vety 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 Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration $220q $65q $38q $15q $ 530 + $12q $1,250+$2q $3.240 +$1