AirQual Test Corporation provides on-site air quality testing services. The comp
ID: 2553445 • Letter: A
Question
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: Actual Total Variable $ 279 $ 32 Fixed Component per Month Component per Job for February 36,310 Revenue Technician wages Mobile lab operating expenses Office expense:s Advertising expenses Insurance Miscellaneous expenses $ 8,200 $ 5,000 $ 2,600 $ 1,600 $ 2,880 $ 950 8,050 $ 9,320 $ 2,730 $1,670 $ 2,880 $ 395 The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $5,000 plus $32 per job, and the actual mobile lab operating expenses for February were $9,320. The company expected to work 140 jobs in February, but actually worked 146 jobs Required Prepare a 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
AIR QUAL Test Corporation Flexible Budget Performance Report For the month ended February 28 Actual Results Flexible Budget Variance Flexible Budget Sales VolumeVariance Planning Budget Amount F / U Amount F / U Jobs 146 146 140 Revenue 36310 4424 U 40734 1674 F 39060 Expenses: Technical Wages 8050 150 F 8200 0 8200 Mobile lab and operating expenses 9320 352 F 9672 192 U 9480 Office expenses 2730 162 F 2892 12 U 2880 Advertising Expenses 1670 70 U 1600 0 1600 Insurance 2880 0 2880 0 2880 Miscellaneous Expense 395 701 F 1096 6 U 1090 Total Expense 25045 1295 F 26340 -210 U 26130 Net Operating Income 11265 3129 U 14394 1464 F 12930
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