Question

Check my work 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 Planning Results Budget Variances 155 150 Lessons $ 36,970 $ 36,000 $ 970 F Revenue Expenses: Instructor wages Aircraft depreciation Fuel Maintenance Ground facility expenses Administration Total expense Net operating income 9,920 4,805 3,270 2,530 2,205 3,815 26,545 $ 10,425 9.750 4.650 2,700 2.700 2,360 2,250 3,920 25,630 $ 10.370 $ 170 U 155 U 570 U 170 U 45 F 105 F 915 U 55 P 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 is the number of lessons sold:

correct answers only please

Answer 1

	Actual results	Revenue and spending variances		Flexible budget	Activity variances		Planning budget
Lessons	155			155			150
Revenue	36970	230	U	37200	1200	F	36000
Expenses:
Instructor wages	9920	155	F	10075	325	U	9750
Aircraft depreciation	4805	0	None	4805	155	U	4650
Fuel	3270	480	U	2790	90	U	2700
Maintenance	2530	110	U	2420	60	U	2360
Ground facility expenses	2205	70	F	2275	25	U	2250
Administration	3815	125	F	3940	20	U	3920
Total expense	26545	240	U	26305	675	U	25630
Net operating income	10425	470	U	10895	525	F	10370