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 Variable Fixed Component Component per Actual Total per Month Job Revenue Technieian wages Mobile lab operating expenses Office expenses Advertising expenses Insurance Miscellaneous expenses 8,400 S4,500 2,300 1,610 2,850 $ 970 for February S33,520 $ 8,250 $ 8,630 2,670 1,680 2,850 S 33 405 The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,500 plus $33 per job, and the actual mobile lab operating expenses for February were $8,630. The company expected to work 130 jobs in February, but actually worked 134 jobs. Requirec 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.) AirQual Test Corporation Flexible Budget Performance Report For the Month Ended February 28 Planning Actual Results Flexible Bu Bu Jobs 134 Revenue S 33,520 8,250 8,630 2,670 1.680 2,850 405 24.485 S 9.035 Technician wages Mobile lab operating expenses Office expenses Miscellaneous expenses Total expense Net operating income

Answer 1

solution :

								AirQual Test Corporation
								Revenue & Spending Variances
								For the month ended February
								Particulars	Flexible Budget	Actual Results	Variances	Remark
									$	$	$
								Revenue	134 jobs*279 per job =36828	33520	-3308	Unfavourable
								Less:-Expenses
								Technician wages	8400	8250	150	Favourable
								Mobile lab operating expense	(134 jobs*33 per job)+4500 =8922	8630	292	Favourable
								Office expenses	(134 jobs*4 per job)+2300 =2836	2670	166	Favourable
								Advertising expenses	1610	1680	-70	Unfavourable
								Insurance	2850	2850	0	Favourable
								Miscellaneous expenses	(134 jobs*1 per job)+970 =1104	405	699	Unfavourable