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 $4,600 plus $29 per job, and the actual mobile lab operating expenses for February were $9,110.

AirQual Test Corporation
Flexible Budget Performance Report
For the Month Ended February 28
Revenue and Spending Variances Activity Variances
Revenue F    U
Expenses:              
Technician wages              
Mobile lab operating expenses              
Office expenses              
Advertising expenses              
Insurance              
Miscellaneous expenses              
Total expense              
Net operating income

AirQual Test Corporation provides on-site air quality testing services. The company has provided the following data concerning its operations:

Explanation / Answer

Flexible Budget Performance Report For the Month Ended March 31 Revenue and Planning Budget Activity Variances Flexible Budget Spending variance Actual Results Jobs (q) 150 140 140 Revenue ($276.00q) $41,400 $2,760 U $38,640 $110 F $38,750 Expenses: Technician wages ($8,600) 8,600 0 8,600 150 F 8,450 Mobile lab operating expenses 8,950 290 F 8,660 450 U 9,110 ($4,600 + $29.00q) Office expenses ($2,400 + $2.00q) 2,700 20 F 2,680 130 F 2,550 Advertising expenses ($1,590) 1,590 0 1,590 70 U 1,660 Insurance ($2,880) 2,880 0 2,880 0 2,880 Miscellaneous expenses 1100 10 F 1090 685 F 405 ($950 + $1.00q) Total expense 25820 320 F 25500 445 F 25055 Net operating income 15580 $2,440 U 13140 $555 F 13695

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