Wings flight:Critique a Report; Prepare a Performance Report

Wings flight school offers lessons at a small municipal airport. The school's owner and manager has been attempting to evaluate performance and control costs using variance report that compares the planning budget to actual results. A recent variance appears below:
Wings flight school
Variance report
For the month ended august 31

Planning Actual Variances
Budget Results

Lessons.....................................200 210
Revenue....................................$45,000 $47,300 $2300 F
expenses:
instructor wages..........................12,400 12,910 510 U
aircraft depreciation...................11,400 11,970 570 U
Fuel.............................................4,200 5,150 950 U
maintenance................................3,270 3,470 200 U
ground facility expenses..............2,440 2,350 90 F
administration...............................4,410 4,340 70 F
Total expenses..............................38,120 40,190 2,070 U
Net operating income.....................$6,880 $7,110 $230 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 august, but the report shows an unfavorable variance.

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

Revenue............................$225q
Instructor wages.................$62q
Aircraft depreciation..........$57q
Fuel.....................................$21q
Maintenance........................$670+$13q
Ground facility expenses......$1640+$4q
Administration.......................$4210+$1q

Required:
1.Should the owner feel frustrated with the variance reports?Explain
2.Prepare a flexible budget performance report for the school for August
3.Evaluate the school's performance for August