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:

	Fixed Component per Month			Variable Component per Job			Actual Total for February
Revenue				$	277		$	33,260
Technician wages	$	8,600					$	8,450
Mobile lab operating expenses	$	4,500		$	34		$	8,760
Office expenses	$	2,400		$	3		$	2,640
Advertising expenses	$	1,550					$	1,620
Insurance	$	2,860					$	2,860
Miscellaneous expenses	$	930		$	2		$	495

The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,500 plus $34 per job, and the actual mobile lab operating expenses for February were $8,760. The company expected to work 130 jobs in February, but actually worked 138 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.)

xl + le Get Homework Help with Cheo, ×| 镪EXAM 4(HNALJ . CH8,9,10 × dents Icentral pied. https//newconnect.mheducation.com/low/connect html EXAM 4 (FINAL) CH 8, 9, 10 Fixed Component 27 t per Job for 272 Februa $ 8,434 $ 8,76e $ 2,600 5 1,620 $ 2,860 S 495 8,600 s 4,5e0 2,400 Technician wages Mobile lab operating expenses office expenses Advertising expenses s 2,860 5 930 210Miscellaneous expentes The company uses the number of jobs as its measure of activity. For example, mobile lab operat $34 per job, and the a February, but actually worked 138 jobs. actual mobile lab operating expenses for February were $8,760. The company expected to Required Prepare a flexible budget performance report showing AirQual Test Corporation's revenue and spending variand variances for February, (Indicate the effect of each variance by selecting " for favorable, "U effect (i.e. zero variance). Input all amounts es positive values) AirQual Test Corporation Flexible Budget Performance Repoet For the Month Ended February 28 Actual Flexible Planning Jobs 138 s 33.260 Revenue В 450 B T60 2.640 1,620 2 860 495 24 825 Moble lob operating Office expenses Advertising expenses Miscellansous expenss Total expen Net operating incoms < Prey 27 of 28 İll Next> Do NOT Print Multiple Copies If need multiple copies, Print 1 copy of the document

Answer 1

		Flexible budget performance report
			Actual	Revenue & spending		Flexible	Activity variance		Static budget
			budget	variance		budget
no of jobs			138			138			130
	Revenue		33,260	4,966	U	38226	2216	F	36010
less:Exoenses
	Technicial wages		8,450	150	F	8,600	0	N	8,600
mobile lab operating expense			8,760	432	F	9192	272	U	8920
office expense			2,640	174	F	2814	24	U	2790
advertising expense			1,620	70	U	1,550	0	N	1,550
insurance			2,860	0	N	2,860	0	N	2,860
miscellaneous expense			495	711	F	1,206	16	U	1,190
total expense			24,825	1,397	F	26,222	312	U	25,910
net operating income			8,435	3,569	U	12,004	1,904	F	10,100