FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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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:
Revenue
Technician wages
Mobile lab operating expenses
Office expenses
Advertising expenses
Insurance
Miscellaneous expenses
Jobs
Revenue
Expenses:
Technician wages
Mobile lab operating expenses
Office expenses
Fixed
Component
per Month
Advertising expenses
Insurance
$ 8,300
$ 4,800
$ 2,700
$ 1,580
$ 2,860
$930
Miscellaneous expenses
Total expense
Net operating income
The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,800 plus
$30 per job, and the actual mobile lab operating expenses for February were $8,240. The company expected to work 120 jobs in
February, but actually worked 124 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.)
Variable
Component
per Job
$ 279
Actual
Results
$ 30
$ 4
124
$ 30,730
$ 1
8,150
8,240
3,030
1,650
2,860
355
24,285
$ 6,445
Actual
Total for
February
$ 30,730
$ 8,150
$ 8,240
$ 3,030
$1,650
$ 2,860
$ 355
AirQual Test Corporation
Flexible Budget Performance Report
For the Month Ended February 28
Flexible
Budget
Planning
Budget
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Transcribed Image Text: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: Revenue Technician wages Mobile lab operating expenses Office expenses Advertising expenses Insurance Miscellaneous expenses Jobs Revenue Expenses: Technician wages Mobile lab operating expenses Office expenses Fixed Component per Month Advertising expenses Insurance $ 8,300 $ 4,800 $ 2,700 $ 1,580 $ 2,860 $930 Miscellaneous expenses Total expense Net operating income The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,800 plus $30 per job, and the actual mobile lab operating expenses for February were $8,240. The company expected to work 120 jobs in February, but actually worked 124 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.) Variable Component per Job $ 279 Actual Results $ 30 $ 4 124 $ 30,730 $ 1 8,150 8,240 3,030 1,650 2,860 355 24,285 $ 6,445 Actual Total for February $ 30,730 $ 8,150 $ 8,240 $ 3,030 $1,650 $ 2,860 $ 355 AirQual Test Corporation Flexible Budget Performance Report For the Month Ended February 28 Flexible Budget Planning Budget
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