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

The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $5,000 plus $27 per job, and the actual mobile lab operating expenses for February were $8,670.

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.)

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 $33,130 $ 8,350 27 $8,670 $ 22,910 $ 1,660 $ 2,880 $ 395 $ 276 $8,500 $5,000 $2,800 $1,590 $2,880 $ 960

Explanation / Answer

AirQual Test Standard Planning Budget Flexible Budget Actual Result Activity Variance= F   Revenue /spening Variance F   Fixed part per month Variable part per job Feb   Planning Budget-Flexible budget U =Flexible- Actual U Units of Jobs in Feb             130.00              122.00                122.00 Revenue    276.00       35,880.00        33,672.00          33,130.00    2,208.00 U          542.00 U Technician wages    8,500.00         8,500.00          8,500.00            8,350.00                 -            150.00 F   Mobile lab operating expenses    5,000.00       27.00         8,510.00          8,294.00            8,670.00        216.00 F            376.00 U Office expenses    2,800.00         2.00         3,060.00          3,044.00            2,910.00          16.00 F            134.00 F   Advertising expenses    1,590.00         1,590.00          1,590.00            1,660.00                 -              70.00 U Insurance    2,880.00         2,880.00          2,880.00            2,880.00                 -                     -   Miscellaneous Expenses        960.00         1.00         1,090.00          1,082.00                395.00            8.00 F            687.00 F   Total expenses       25,630.00        25,390.00          24,865.00        240.00 F            525.00 F   Net Income       10,250.00          8,282.00            8,265.00    1,968.00 U            17.00 U

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