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 Fixed Component per Month Variable Component per Job $ 360 Actual Total for February $ 18,950 Technician wages $ 6,400 $ 6,450 Mobile lab operating expenses $ 2,900 $ 35 $ 4,530 Office expenses $ 2,600 $ 2 $ 3,050 Advertising expenses $970 $ 995 Insurance $ 1,680 Miscellaneous expenses $ 500 $ 3 $ 1,680 $ 465 The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $2,900 plu $35 per job, and the actual mobile lab operating expenses for February were $4,530. The company expected to work 50 jobs in February, but actually worked 52 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 n
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 Fixed Component per Month Variable Component per Job $ 360 Actual Total for February $ 18,950 Technician wages $ 6,400 $ 6,450 Mobile lab operating expenses $ 2,900 $ 35 $ 4,530 Office expenses $ 2,600 $ 2 $ 3,050 Advertising expenses $970 $ 995 Insurance $ 1,680 Miscellaneous expenses $ 500 $ 3 $ 1,680 $ 465 The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $2,900 plu $35 per job, and the actual mobile lab operating expenses for February were $4,530. The company expected to work 50 jobs in February, but actually worked 52 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 n
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter9: Profit Planning And Flexible Budgets
Section: Chapter Questions
Problem 63E: Use the following information for Exercises 9-63 and 9-64: Palladium Inc. produces a variety of...
Related questions
Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Topic Video
Question
Vikrambahi
![Exercise 9-16 (Static) Flexible Budget Performance Report [LO9-1, LO9-2, LO9-3, LO9-4]
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
Revenue
per Job
$ 360
Actual
Total for
February
$ 18,950
Technician wages
$ 6,400
$ 6,450
Mobile lab operating expenses
$ 2,900
$ 35
$ 4,530
Office expenses
$ 2,600
$ 2
$ 3,050
Advertising expenses
$ 970
$ 995
Insurance
$ 1,680
$ 1,680
Miscellaneous expenses
$ 500
$ 3
$ 465
The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $2,900 plus
$35 per job, and the actual mobile lab operating expenses for February were $4,530. The company expected to work 50 jobs in
February, but actually worked 52 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.)
AirQual Test Corporation
Flexible Budget Performance Report
Jobs
Revenue
Expenses:
Technician wages
Mobile lab operating expenses
Office expenses
Advertising expenses
Insurance
Miscellaneous expenses
Total expense
Net operating income
For the Month Ended February 28
Flexible
Actual Results
Planning
Budget
Budget
52
$
18,950
6,450
4,530
3,050
995
1,680
465
17,170
$
1,780](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7ec0fc20-8b95-45f1-9405-1c1bf53157e7%2Fd490afa9-fae1-4533-b5b2-6bd537d27b7c%2Fvwuzze_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Exercise 9-16 (Static) Flexible Budget Performance Report [LO9-1, LO9-2, LO9-3, LO9-4]
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
Revenue
per Job
$ 360
Actual
Total for
February
$ 18,950
Technician wages
$ 6,400
$ 6,450
Mobile lab operating expenses
$ 2,900
$ 35
$ 4,530
Office expenses
$ 2,600
$ 2
$ 3,050
Advertising expenses
$ 970
$ 995
Insurance
$ 1,680
$ 1,680
Miscellaneous expenses
$ 500
$ 3
$ 465
The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $2,900 plus
$35 per job, and the actual mobile lab operating expenses for February were $4,530. The company expected to work 50 jobs in
February, but actually worked 52 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.)
AirQual Test Corporation
Flexible Budget Performance Report
Jobs
Revenue
Expenses:
Technician wages
Mobile lab operating expenses
Office expenses
Advertising expenses
Insurance
Miscellaneous expenses
Total expense
Net operating income
For the Month Ended February 28
Flexible
Actual Results
Planning
Budget
Budget
52
$
18,950
6,450
4,530
3,050
995
1,680
465
17,170
$
1,780
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
Excel Applications for Accounting Principles
Accounting
ISBN:
9781111581565
Author:
Gaylord N. Smith
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College