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Problem 9-21 Critique a Report; Prepare a Performance Report [LO9-1, LO9-4, LO9-6]

TipTop Flight School offers flying lessons at a small municipal airport. The schools 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		185		180
Revenue	$	40,530	$	39,600	$	930	F
Expenses:
Instructor wages		11,680		11,520		160	U
Aircraft depreciation		7,400		7,200		200	U
Fuel		4,260		3,780		480	U
Maintenance		2,730		2,620		110	U
Ground facility expenses		2,070		2,150		80	F
Administration		4,320		4,370		50	F
Total expense		32,460		31,640		820	U
Net operating income	$	8,070	$	7,960	$	110	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	$220q
Instructor wages	$64q
Aircraft depreciation	$40q
Fuel	$21q
Maintenance	$ 640 + $11q
Ground facility expenses	$1,610 + $3q
Administration	$4,190 + $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).) SEE TABLE HERE: https://gyazo.com/b213139f7839e6b2db6d0a88340198d8

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