Problem 9-21 Critique a Report; Prepare a Performance Report [LO9-1, LO9-4, LO9-6] 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 260 250 Lessons Revenue $55,320 $55,000 $320 F Expenses Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration 16,290 14,300 5,940 3,920 2,300 4,385 15,750 540 U 13,750 550 U 5,000 940 U 3,630 290 U 80 F 65 F 2,380 4,450 Total expense 47,135 5 44,960 2,175 1,855 Net operating income $ 8,185 10,040 $ After several months of using such variance 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 $220q $63q $55q $20q 630 $12q $1,630 $3q $4,200 + $1