10 Check my work 17 Exercise 9-17 Flexible Budget Performance Report [LO9-1, LO9

Question

10 Check my work 17 Exercise 9-17 Flexible Budget Performance Report [LO9-1, LO9-2, LO9-3, LO9-4] 10 points 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 $ 280 Revenue Technician vages Mobile lab operating expenses Offiee expenses Advertising expenses Insurance Miscellaneous expenses for February 36,450 $ 8,250 $ 9,740 $ 2,610 S 1,670 $ 2,880 $ 425 eBook 8,400 5,000 $ 2,200 1,600 2, 880 $ 980 $ 35 Print The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $5,000 plus $35 per job, and the actual mobile lab operating expenses for February were $9,740. The company expected to work 140 jobs in February, but actually worked 150 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.)

Explanation / Answer

Particulars Cost formula Actual Revenue and spending variance Flexible budget Activity variance Static budget Number of jobs 150 150 140 Revenue 280q 36450 5550 U 42000 2800 F 39200 Expenses Technician wages 8400 8250 150 F 8400 0 8400 Mobile lab operating expense 5000+35q 9740 510 F 10250 350 U 9900 Office expenses 2200+4q 2610 190 F 2800 40 U 2760 Advertising expense 1600 1670 100 U 1600 0 1600 Insurance 2880 2880 0 2880 0 2880 Miscellaneous expense 980+1q 425 705 F 1130 10 U 1120 Total expense 25575 1485 F 27060 400 U 26660 Net operating income 10875 4065 U 14940 2400 F 12540

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