Managerial Accounting: AP10-19 TipTop Flight School offers flying lessons

Managerial Accounting
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
Planning Budget Actual Results Variances
Lessons 131 159
Revenue 28,558 36,300 7,742 F
Instructor wages 8,122 9,653 1,531 U
Aircraft depreciation 4,716 5,724 1,008 U
Fuel 1,703 2,920 1,217 U
Maintenance 1,437 2,650 1,213 U
Ground facility expenses 1,743 1,510 233 F
Administration 3,421 3,220 201 F
Total expense 21,142 25,677 4,535 U
Net operating income 7,416 10,623 3,207 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 $218q
Instructor wages $62q
Aircraft depreciation $36q
Fuel $13q
Maintenance $520 + $7q
Ground facility expenses $1,350 + $3q
Administration $3,290 + $1q

Prepare a flexible budget performance report for the school for July. (Leave no cells blank - be certain to enter "0" wherever required. 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. Omit the "$" sign in your response.)
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