70.2K

Verified Solution

Link Copied!

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				$	280		$	39,250
Technician wages	$	8,400					$	8,250
Mobile lab operating expenses	$	4,600		$	31		$	9,090
Office expenses	$	2,400		$	2		$	2,550
Advertising expenses	$	1,580					$	1,650
Insurance	$	2,890					$	2,890
Miscellaneous expenses	$	920		$	1		$	375

The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,600 plus $31 per job, and the actual mobile lab operating expenses for February were $9,090. The company expected to work 150 jobs in February, but actually worked 152 jobs.

Required:

Prepare a flexible budget performance report showing AirQual Test Corporations 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 Actual Results Flexible Budget Planning Budget Jobs 152 Revenue $ 39,250 Expenses 8,250 9,090 2,550 1,650 2,890 375 24,805 $ 14,445 Technician wages Mobile lab operating expenses Office expenses Advertising expenses Insurance Miscellaneous expenses Total expense Net operating income

Answer & Explanation Solved by verified expert

See Answer