Question

Exercise 9-16 (Algo) Flexible Budget Performance Report [LO9-1, LO9-2, LO9-3, LO9-4] Air Qual 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 per Month Revenue Technician wages Mobile lab operating expenses office expenses Advertising expenses Insurance Miscellaneous expenses $ 8,400 $ 4,500 $ 2,500 $ 1,610 $ 2,850 $ 970 Variable Actual Total Component per Job for February $ 279 $ 30,730 $ 8,250 $ 35 $ 8,540 $ 2 $ 2,590 $ 1,680 $ 2,850 $ 2 $ 515 The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,500 plus $35 per job, and the actual mobile lab operating expenses for February were $8,540. The company expected to work 120 jobs in February, but actually worked 130 jobs. Required: Prepare a flexible budget performance report showing Air Qual 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 (.e., zero variance). Input all amounts as positive values.) AlrQual Test Corporation Flexible Budget Performance Report For the Month Ended February 28 Actual Revenue and Flexible Results Spending Variances Budget 130 130 Activity Variances Planning Budget Jobs $ 30.730 s 5,5400 $ 36,270) F Revenue Expenses Technician wages Mobile lab operating expenses Office expenses Advertising expenses 150 F 8,400 8,250 8,540 None F U 2,590 1,680 F 700 U None

Answer 1

Solution:

	Actual Results	Revenue and Spending variances	Flexible Budget	Activity variances	Planning Budget
Jobs	130			130			120
Revenue	30,730	5,540	U	36270	2790	F	33480
Expenses:
Technician wages	8,250	150	F	8,400	0	None	8,400
Mobile lab operating expenses	8,540	510	F	9050	350	U	8700
Office expenses	2,590	170	F	2760	20	U	2740
Advertising expenses	1,680	-70	U	1,610	0	None	1,610
Insurance	2,850	0	None	2,850	0	None	2,850
Miscellaneous expenses	515	715	F	1,230	20	U	1210
Total expense	24,425	1,475	F	25,900	390	U	25,510
Net operating Income	6,305	4,065	U	10,370	2400	F	7970

Copy of HomeworkLib2 - Microsoft Excel (Product Activation Failed) X File Home Insert Formulas Page Layout Data Review View X % Cut AutoSum Calibri 11 A A z Wrap Text General Normal Bad Good la Copy Fill - Paste B 1 U- *Merge & Center GP, % Calculation Conditional Format as Neutral Formatting Table Check Cell Insert Delete Format Format Painter 2 Clear Sort & Find & Filter - Select Editing Clipboard Font Alignment Number Styles Cells H23 fac A B с D E F G H 1 J K L M N O Р 0 1 2 Fixed component Variable component Actual total per month per job for Feb 279 30,730 8,400 8,250 Actual Results 130 30,730 Revenue and Spending variances Flexible Budget Activity variances Planning Budget 130 120 5,540 U 36270 2790 F 33480 3 Jobs 4 Revenue 5 6 35 2 7 8 Revenue Technician wages Mobile lab operating expenses Office expenses Advertising expense Insurance Misc expenses Mobile lab operating Actual mobile lab operating 4,500 2,500 1,610 2,850 970 8,540 2,590 1,680 2,850 515 Expenses: Technician wages Mobile lab operating expenses Office expenses Advertising expenses Insurance 8,250 8,540 2,590 1,680 2,850 150 F 510F 170 F -70 U o None 8,400 9050 2760 1,610 2,850 O None 350 U 20 U O None O None 8,400 8700 2740 1,610 2,850 2 9 10 4,500 35 8,540 Expected 120 Actual 130 Miscellaneous expenses Total expense Net operating Income 515 24,425 6,305 715 F 1,475 F 4,065 U 1,230 25,900 10,370 20 U 390 U 2400 F 1210 25,510 7970 Job 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Sheet182 Sheet183 Sheet184 Sheet185 Sheet186 Sheet187 Sheet188 Sheet189 Sheet190 Sheet191 Sheet192 Ready 100% 1 Type here to search о DI D 61% () ENG 23:32 25-09-2020

9 Copy of HomeworkLib2 - Microsoft Excel (Product Activation Failed) X File Home Insert Formulas Page Layout Data Review View X % Cut AutoSum Calibri 11 A A z Wrap Text General Normal Bad Good la Copy Fill Paste B 1 U- *Merge & Center Calculation Conditional Format as Neutral Formatting Table Check Cell Insert Delete Format Format Painter 2 Clear Sort & Find & Filter - Select Editing Clipboard Font Alignment Number Styles Cells K26 fac A B с D E F G H 1 J K L M N O 1 Fixed component Variable component per job 279 Actual total for Feb 2 per month Revenue and Spending variances Flexible Budget =D13 =K4-H4 U =D3*K3 3 Jobs Actual Results =D13 =E3 30730 8250 Activity variances Planning Budget =C13 =K4-N4 F =N3*D3 4 8400 Revenue 35 5 6 4500 2500 2 None Revenue Technician wages Mobile lab operating expenses Office expenses Advertising expense Insurance Misc expenses Mobile lab operating expenses Actual mobile lab operating 7 8 =E4 =E5 8540 2590 1680 2850 515 1610 2850 970 4500 Expenses: Technician wages Mobile lab operating expenses Office expenses Advertising expenses Insurance =K6-H6 F =K7-H7 F =K8-H8 F =K9-H9 U =K10-H10 None =C4 =(D5*K3)+C5 =(D6*K3)+C6 =C7 =C8 =C4 =(N3*D5)+C5 =(N3*D6)+C6 =K6-N6 =K7-N7 =K8-N8 =K9-N9 =K10-N10 =E6 =E7 =E8 U U None None 2 9 10 -C7 35 =C8 U 8540 Expected 120 Actual Miscellaneous expenses Total expense Net operating Income =E9 =SUM(H6:H11) =H4-H12 =K11-H11 F =K12-H12 F =K13-H13 U =(D9*K3)+C9 =SUM(K6:K11) =K4-K12 =K11-N11 =K12-N12 =K13-N13 U =(N3*D9)+C9 =SUM(N6:N11) =N4-N12 Job 130 F 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Sheet182 Sheet183 Sheet184 Sheet185 Sheet186 Sheet187 Sheet188 Sheet189 Sheet190 Sheet191 Sheet192 Ready M 100% 0 Type here to search 1 о D DI 61% ») ENG 23:33 25-09-2020 =