Problem 9-20 (Algo) Critique a Report; Prepare a Performance Report [LO9-1, LO9-2, LO9-3, LO9-4]

TipTop Flight School offers flying lessons at a small municipal airport. The schools 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 Results	Planning Budget	Variances
Lessons	155	150
Revenue	$ 36,920	$ 36,000	$ 920	F
Expenses:
Instructor wages	9,870	9,750	120	U
Aircraft depreciation	4,960	4,800	160	U
Fuel	2,470	1,950	520	U
Maintenance	2,280	2,160	120	U
Ground facility expenses	1,680	1,700	20	F
Administration	3,440	3,520	80	F
Total expense	24,700	23,880	820	U
Net operating income	$ 12,220	$ 12,120	$ 100	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:

	Cost Formulas
Revenue	$240q
Instructor wages	$65q
Aircraft depreciation	$32q
Fuel	$13q
Maintenance	$510 + $11q
Ground facility expenses	$1,250 + $3q
Administration	$3,220 + $2q

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.)

Problem 9-20 (Algo) Critique a Report; Prepare a Performance Report (LO9-1, LO9-2, LO9-3, LO9-4) 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 Planning Budget 150 $ 36,000 $ 920 F TipTop Flight School Variance Report For the Month Ended July 31 Actual Results Lessons 155 Revenue $ 36,920 Expenses: Instructor wages 9,870 Aircraft depreciation 4,960 Fuel 2, 470 Maintenance 2,280 Ground facility expenses 1,680 Administration 3,440 Total expense 24,700 Net operating income $ 12, 220 9,750 4,800 1,950 2,160 1,700 3,520 23,880 $ 12,120 120 U 160 U 520 U 120 U 20F 80F 820 U $ 100 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 $240g $659 $329 $139 $510 + $119 $1,250 + $39 $3,220 + $ 29 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 Flexible Results Budget 155 Planning Budget 150 $ 36,000 Lessons Revenue $ 36,920 Expenses: Instructor wages 9,870 9,750 Aircraft depreciation 4,960 4,800 Fuel 2,470 1,950 2,160 Maintenance 2,280 Ground facility expenses 1,680 1,700 Administration 3,520 3,440 24,700 Total expense 23,880 $ 12,120 Net operating income $ 12,220