, t09-2g PROBLEM 9-22 Critique a Report; Prepare a Performance Report L09-ig , oo- 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 repoct that compares the planning budget to actual results. A recent variance report sppears below TipTop Flight School Variance Report For the Month Ended July 31 Actual Planning Results Budget Variances 155 150 Lessons Revenue Expenses: $33900 $33.000 $900F Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses 1540 1550 10F 9,870 9,750 120 U 5,890 5,700 190 U 2,750 2.250 500 U 2,450 2,330 120 U Total expense Net operating income 3.320 3390 70F 25.820 24970 50U S 8080 8,030 S50F After several months of using such variance reports, the owner has become frustrated For example, sbe 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 $220g $654 $38g S15g s530 $12q $1,250+$2g 3,240+$1g Required: 1 Should the owner feel frustrated with the variance reports? Explain. 2. Using Exhibit 9-0 as your guide, prepare a flexible budges performance report for the school for July. 3. Evaluate the school's performance for July