AirQual Test Corporation provides on-site air quality testing services. The comp

Question

AirQual Test Corporation provides on-site air quality testing services. The company has provided the following data concerning its operations Revenue Technician wages Mobile lab operating expenses Office expenses Advertising expenses Insurance Miscellaneous expenses Fixed Variable Actual Component Component Total for per Month per Job February $27,830 $8,250 $ 27 7,930 $ 3 2,580 $ 1,670 $2,870 $ 2 S 485 $278 $8,400 $4,800 $2,400 $1,600 $2,870 S 960 The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,800 plus $27 per job, and the actual mobile lab operating expenses for February were $7,930 The company expected to work 110 jobs in February, but actually worked 104 jobs Required Complete the flexible budget performance report showing AirQual Test Corporation's revenue and spending variances and activity variances for February. (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.)

Explanation / Answer

Flexible Budget performance report is prepared as under:

Actual Results Flexible Budget Planning Budget Jobs 104 104 110 Revenue 27,830 28912 30580 Expenses:    Technician Wages 8,250 8,400 8,400    Mobile Lab operating expenses 7,930 7608 7770    Office expenses 2,580 2712 2730    Advertising expenses 1,670 1,600 1,600    Insurance 2,870 2,870 2,870    Miscellaneous expenses 485 1168 1180 Total expense 23,785 24,358 24,550 Net operating Income 4,045 4,554 6,030

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