Problem 9-22 Critique a Report; Prepare a Performance Report [LO9-1, LO9-2, LO9-3, 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 Budget Results Variances Lessons 145 140 $ 36,030 35,000 $1, 030 F Revenue Expenses Instructor wages Aircraft depreciation 7,835 7,700 135 U 5,365 5,180 2,800 185 U Fuel 3,430 3,135 2,145 630 U Maintenance Ground facility expenses 3,000 135 U 2,220 75 F Administration 3,625 3,720 95 F Total expense 25,535 24,620 915 U $ 10,495 $ 10,380 115 F Net operating income 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. W The planning budget was developed using the following formulas, where q is the number of lessons sold: Cost Formulas $250q $55q $37q $20q $620 $17q $1,800 $3q $3,440 $2q Revenue Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration Required: 2. Complete the flexible budget performance report for the school for July. (Indicate the effect of each variance by selecting "E" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.) 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 Results Flexible Planning Budget Budget Lessons 145 140 Revenue 36,030 35,000 Expenses: Instructor wages 7,835 7,700 Aircraft depreciation 5,365 5,180 2,800 Fuel 3,430 Maintenance 3,135 3,000 Ground facility expenses 2,145 2,220 Administration 3,625 3,720 Total expense 25,535 24,620 Net operatina income $ 10,495 10,380