Tiplop 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: Lessons Revenue Expenses: Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration TipTop Flight School Variance Report For the Month Ended July 31 Total expense Net operating income Actual Results 225 $ 60,400 17,800 7,650 4,340 3,650 2,470 3,960 39,870 $ 20,530 Planning Budget 220 $ 59,400 17,600 7,480 3,740 3,450 2,530 4,040 38,840 $ 20,560 Variances $ 1,000 F 200 U 170 U 600 U 200 U 60 F 80 F 1,030 U $ 30 F After several months of using these reports, the owner has become frustrated. For example, she is quite confident that nstructor 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:
Tiplop 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: Lessons Revenue Expenses: Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration TipTop Flight School Variance Report For the Month Ended July 31 Total expense Net operating income Actual Results 225 $ 60,400 17,800 7,650 4,340 3,650 2,470 3,960 39,870 $ 20,530 Planning Budget 220 $ 59,400 17,600 7,480 3,740 3,450 2,530 4,040 38,840 $ 20,560 Variances $ 1,000 F 200 U 170 U 600 U 200 U 60 F 80 F 1,030 U $ 30 F After several months of using these reports, the owner has become frustrated. For example, she is quite confident that nstructor 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:
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
Transcribed Image Text: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:
Lessons
Revenue
Expenses:
Instructor wages
Aircraft depreciation
Fuel
Maintenance
Ground facility expenses
Administration
TipTop Flight School
Variance Report
For the Month Ended July 31
Total expense
Net operating income
Actual
Results
225
$ 60,400
17,800
7,650
4,340
3,650
2,470
3,960
39,870
$ 20,530
Planning
Budget
220
$ 59,400
17,600
7,480
3,740
3,450
2,530
4,040
38,840
$ 20,560
Variances
$ 1,000 F
200 U
170 U
600 U
200 U
60 F
80 F
1,030 U
$ 30 F
After several months of using these 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:

Transcribed Image Text:Revenue
Instructor wages
Aircraft depreciation
Fuel
Maintenance
Ground facility expenses
Administration
Lessons
Revenue
Expenses:
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.)
Instructor wages
Aircraft depreciation
Fuel
Maintenance
Ground facility expenses
Administration
Cost Formulas
$270g
$80g
$34g
$17g
$590+ $13g
Total expense
Net operating income
$1,650 + $4q
$3,380+ $3q
TipTop Flight School
Flexible Budget Performance Report
For the Month Ended July 31
Actual
Results
225
$ 60,400
17,800
7,650
4,340
3,650
2,470
3,960
39,870
$ 20,530
Flexible
Budget
Planning
Budget
220
$ 59,400
$
17,600
7,480
3,740
3,450
2,530
4,040
38,840
20,560
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