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 Results Planning Budget Variances Lessons   145     140                             Revenue $ 33,110   $ 32,200   $ 910 F Expenses:                   Instructor wages   8,510     8,400     110 U Aircraft depreciation   4,350     4,200     150 U Fuel   2,470     1,960     510 U Maintenance   2,010     1,900     110 U Ground facility expenses   1,465     1,480     15 F Administration   3,265     3,340     75 F Total expense   22,070     21,280     790 U Net operating income $ 11,040   $ 10,920   $ 120 F     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 $1,200 + $2q Administration $3,200 + $1q      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.)

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Chapter1: Financial Statements And Business Decisions
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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
Results
Planning
Budget
Variances
Lessons   145     140        
                   
Revenue $ 33,110   $ 32,200   $ 910 F
Expenses:                  
Instructor wages   8,510     8,400     110 U
Aircraft depreciation   4,350     4,200     150 U
Fuel   2,470     1,960     510 U
Maintenance   2,010     1,900     110 U
Ground facility expenses   1,465     1,480     15 F
Administration   3,265     3,340     75 F
Total expense   22,070     21,280     790 U
Net operating income $ 11,040   $ 10,920   $ 120 F
 

 

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 $1,200 + $2q
Administration $3,200 + $1q
 

  
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.)

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