AirQual Test Corporation provides on-site air quality testing services. The comp

Question

AirQual Test Corporation provides on-site air quality testing services. The company has provided the following data concerning its operations:

The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,800 plus $26 per job, and the actual mobile lab operating expenses for February were $8,860. The company expected to work 150 jobs in February, but actually worked 146 jobs.

Required: Complete the 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.)

Fixed
Component
per Month Variable
Component
per Job Actual
Total for
February   Revenue    $ 280      $ 39,250       Technician wages $ 8,500            $ 8,350       Mobile lab operating expenses $ 4,800       $ 26      $ 8,860       Office expenses $ 2,600       $ 4      $ 3,050       Advertising expenses $ 1,600       $ 1,670       Insurance $ 2,900       $ 2,900       Miscellaneous expenses $ 950       $ 1      $ 405    

Explanation / Answer

Details No Of Jobs Revenue Per Job Std Actual Variance F/U Revenue 146 280    40,880.00      39,250.00 1630 U Technician wages      8,500.00         8,350.00 150 F Mobile lab operating expenses      8,700.00         8,860.00 -160 U Office Expense      3,200.00         3,050.00 150 F Advertising expenses      1,600.00         1,670.00 -70 U Insurance      2,900.00         2,900.00 0 None Miscellaneous expenses      1,100.00            405.00 695 F Net Profit/(Loss)    14,880.00      14,015.00 765 U

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