(This is the middle of the two images)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: cost formulas revenue $230q instructor wages $60q aircraft depreciation $30q fuel $14q maintenance $500 + $10q ground facility expenses **Flexible Budget Performance Report for TipTop Flight School****Required:**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.**Flexible Budget Performance Report***For the Month Ended July 31:*| | Actual Results | Flexible Budget | Planning Budget ||-----------------------|----------------|-----------------|-----------------|| **Lessons** | 145 | | 140 || **Revenue** | $33,110 | | $32,200 || **Expenses:** | | | || Instructor wages | $8,510 | | $8,400 || Aircraft depreciation | $4,350 | | $4,200 || Fuel | $2,470 | | $1,960 || Maintenance | $2,010 | | $1,900 || Ground facility expenses | $1,465 | | $1,480 || Administration | $3,265 | | $3,340 || **Total expense** | $22,070 | | $21,280 || **Net operating income** | $11,040 | | $10,920 |**Explanation:**- **Lessons & Revenue:** The actual number of lessons given was 145 compared to the planned 140, resulting in actual revenue of $33,110, exceeding the planned revenue of $32,200. - **Expenses:** Various expenses are listed, with actual results compared to planning budget figures. - **Instructor Wages:** Slightly higher than planned. - **Aircraft Depreciation:** Slightly higher than planned. - **Fuel and Maintenance:** Notably higher than planned, indicating increased usage or rates. - **Ground Facility Expenses and Administration:** Slightly below the planned budget.- **Net Operating Income:** The net operating income was higher than planned as a result of higher revenue, despite increased expenses.This report helps in assessing the financial performance and operational efficiency of the school for July, allowing management to make informed decisions based on variances. **TipTop Flight School Variance Report Explanation**TipTop Flight School provides flying lessons at a small municipal airport. The school uses variance reports to evaluate performance and control costs by comparing the planning budget to actual results. Below is a breakdown of a variance report for the month ended July 31.### Variance Report Overview**Lessons**- **Actual Results:** 145- **Planning Budget:** 140**Revenue**- **Actual Results:** $33,110- **Planning Budget:** $32,200- **Variance:** $910 Favorable (F)**Expenses**1. **Instructor Wages** - **Actual:** $8,510 - **Budget:** $8,400 - **Variance:** $110 Unfavorable (U) 2. **Aircraft Depreciation** - **Actual:** $4,350 - **Budget:** $4,200 - **Variance:** $150 U3. **Fuel** - **Actual:** $1,470 - **Budget:** $1,960 - **Variance:** $490 F4. **Maintenance** - **Actual:** $2,010 - **Budget:** $1,900 - **Variance:** $110 U5. **Ground Facility Expenses** - **Actual:** $1,465 - **Budget:** $1,480 - **Variance:** $15 F6. **Administration** - **Actual:** $3,265 - **Budget:** $3,340 - **Variance:** $75 F**Total Expenses**- **Actual:** $22,070- **Budget:** $21,280- **Variance:** $790 U**Net Operating Income**- **Actual:** $11,040- **Budget:** $10,920- **Variance:** $120 F### AnalysisThe school's owner noted that despite confidence in controlling instructor wages, there was an unfavorable variance reported. Variance reports like these help identify discrepancies between planned and actual financial performance.### Budgeting FormulasThe planning budget was formulated using specific calculations where $ q $ represents the number of lessons sold. These calculations provided benchmarks for evaluating the school’s financial outcomes.Understanding variance reports is crucial for continuous improvement and financial accuracy in business management.

A flexible budget performance report is used to compare actual results to the budgeted results generated by a flexible budget. This approach results in budgeted expenses that are significantly more relevant to the actual performance that an organization experiences. Flexible Budget Performance Report