W przeta 2. Explain the activity variances PROBLEM 9-22 Critique a Report: Prepare a Performance Report LOO Tito Flight School offers flying lessons at a small municipal air manager has been attempting to evaluate performance and control that compares the planning budget to actual results. A recent variance me 1.09-2. LO9-3, 109-4,10 The school's wet costs using a variance rep ent variance report appears below Planning Budget Variances 150 $33,000 $900 F TipTop Flight School Variance Report For the Month Ended July 31 Actual Results Lessons 155 Revenue ..... $33,900 Expenses: Instructor wages ... 9,870 Aircraft depreciation .... 5,890 Fuel 2.750 Maintenance ... 2,450 Ground facility expenses 1.540 Administration 3,320 Total expense .......... 25,820 Net operating income ...... $ 8.080 cos Our 9.750 5.700 2.250 2,330 1.550 3,390 24.970 $ 8,030 120 U 190 U 500 U 120 U 10 F 70 F 850 $ 50 F oth hac we After several months of using such variance reports, the owner has become frustrated example, she is quite confident that instructor wages were very tightly controlled in July 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 $2209 $654 $389 $159 $530+ $124 $1,250 + $ 24 $3,240 + $19 Required: 1. Should the owner feel frustrated with the variance reports? Explain. 2. Using Exhibit 9-8 as your guide, prepare a flexible budget performance report for the school for July. 3. Evaluate the school's performance for July. PDORIA