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: TipTop Flight School Variance Report For the Month Ended July 31 Actual Results 185 Planning Budget 180 Variances Lessons $ 42,360 $ 41,400 $ 960 F Revenue Expenses: Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration Total expense Net operating income 10,960 10,800 160 U 7,400 7,200 200 U 3,620 3,060 560 U 2,690 2,530 160 U 2,130 2,170 40 F 3,720 3,840 120 F 30,520 29,600 920 U $ 11, 840 $ 11,800 $ 40 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 $2309 $609 $409 $179 $550 + $119 $1,450 + $49 $3,300 + $39 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 Results Flexible Budget Planning Budget 180 Lessons 185 Revenue $ 42,360 $ 41,400 Expenses: Instructor wages 10,960 10,800 Aircraft depreciation 7,400 7,200 Fuel 3,620 3,060 Maintenance 2,690 2,530 Ground facility expenses 2,130 2,170 Administration 3,720 3,840 Total expense 30,520 29,600 Net operating income $ 11,840 $ 11,800