TipTop Flight School offers flying lessons at a small municipal airport. The schools owner and manager attempted to evaluate performance and control costs using a variance report comparing 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	$ 36,030	$ 35,000	$ 1,030	F
Expenses:
Instructor wages	7,835	7,700	135	U
Aircraft depreciation	5,365	5,180	185	U
Fuel	3,430	2,800	630	U
Maintenance	3,135	3,000	135	U
Ground facility expenses	2,145	2,220	75	F
Administration	3,625	3,720	95	F
Total expenses	25,535	24,620	915	U
Net operating income	$ 10,495	$ 10,380	$ 115	F

After several months of using these reports, the owner has become frustrated. For example, she is confident instructor wages were very tightly controlled in July, but the report shows an unfavorable variance.

She developed the planning budget using the following formulas, where q is the number of lessons sold:

	Cost Formulas
Revenue	$250q
Instructor wages	$55q
Aircraft depreciation	$37q
Fuel	$20q
Maintenance	$620 + $17q
Ground facility expenses	$1,800 + $3q
Administration	$3,440 + $2q