AirQual Test Corporation provides on-site air quality testing services. The company has provided the following cost formulas and actual results for the month of February: Fixed Component Variable Component per Month per Job Actual Total for February Revenue $ 276 $ 30,370 Technician wages $ 8,100 $ 7,950 Mobile lab operating expenses $ 4,600 $ 30 $ 8,040 Office expenses $ 2,300 $ 4 $ 2,630 Advertising expenses $ 1,580 $ 1,650 Insurance $ 2,860 Miscellaneous expenses $ 970 $ 2 $ 2,860 $ 515 The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,600 plus $30 per job, and the actual mobile lab operating expenses for February were $8,040. The company expected to work 120 jobs in February, but actually worked 122 jobs. Required: Prepare a flexible budget performance report showing AirQual Test Corporation's revenue and spending variances and activity variances for February. Note: 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. AirQual Test Corporation Flexible Budget Performance Report For the Month Ended February 28 Jobs Actual Results 122 $ 30,370 Revenue Expenses: Technician wages 7,950 Mobile lab operating expenses 8,040 Office expenses 2,630 Advertising expenses 1,650 Insurance 2,860 Miscellaneous expenses 515 Total expense 23,645 Net operating income $ 6,725 Flexible Planning Budget Budget
AirQual Test Corporation provides on-site air quality testing services. The company has provided the following cost formulas and actual results for the month of February: Fixed Component Variable Component per Month per Job Actual Total for February Revenue $ 276 $ 30,370 Technician wages $ 8,100 $ 7,950 Mobile lab operating expenses $ 4,600 $ 30 $ 8,040 Office expenses $ 2,300 $ 4 $ 2,630 Advertising expenses $ 1,580 $ 1,650 Insurance $ 2,860 Miscellaneous expenses $ 970 $ 2 $ 2,860 $ 515 The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,600 plus $30 per job, and the actual mobile lab operating expenses for February were $8,040. The company expected to work 120 jobs in February, but actually worked 122 jobs. Required: Prepare a flexible budget performance report showing AirQual Test Corporation's revenue and spending variances and activity variances for February. Note: 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. AirQual Test Corporation Flexible Budget Performance Report For the Month Ended February 28 Jobs Actual Results 122 $ 30,370 Revenue Expenses: Technician wages 7,950 Mobile lab operating expenses 8,040 Office expenses 2,630 Advertising expenses 1,650 Insurance 2,860 Miscellaneous expenses 515 Total expense 23,645 Net operating income $ 6,725 Flexible Planning Budget Budget
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:AirQual Test Corporation provides on-site air quality testing services. The company has provided the following cost formulas and
actual results for the month of February:
Fixed
Component
Variable
Component
per Month
per Job
Actual
Total for
February
Revenue
$ 276
$ 30,370
Technician wages
$ 8,100
$ 7,950
Mobile lab operating expenses
$ 4,600
$ 30
$ 8,040
Office expenses
$ 2,300
$ 4
$ 2,630
Advertising expenses
$
1,580
$ 1,650
Insurance
$ 2,860
Miscellaneous expenses
$ 970
$ 2
$ 2,860
$ 515
The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,600 plus
$30 per job, and the actual mobile lab operating expenses for February were $8,040. The company expected to work 120 jobs in
February, but actually worked 122 jobs.
Required:
Prepare a flexible budget performance report showing AirQual Test Corporation's revenue and spending variances and activity
variances for February.
Note: 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.
AirQual Test Corporation
Flexible Budget Performance Report
For the Month Ended February 28
Jobs
Actual
Results
122
$ 30,370
Revenue
Expenses:
Technician wages
7,950
Mobile lab operating expenses
8,040
Office expenses
2,630
Advertising expenses
1,650
Insurance
2,860
Miscellaneous expenses
515
Total expense
23,645
Net operating income
$
6,725
Flexible
Planning
Budget
Budget
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