AirQual Test Corporation provides on-site air quality testing services. The comp
ID: 2457073 • Letter: A
Question
AirQual Test Corporation provides on-site air quality testing services. The company has provided the following data concerning its operations.
Fixed Component per Month
Variable Component per job
Actual Total for February
Revenue
$276
$35,890
Technician Wages
$8,400
$8,250
Mobile lab Operating Expenses
$4,800
$28
$8,880
Office expenses
$2,300
$3
$2,570
Advertising expenses
$1,560
$1,630
Insurance
$2,850
$2,850
Miscellaneous expenses
$930
$2
$515
The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,800 plus $28 per job, and the actual mobile lab operating expenses for February were $8,880. The company expected to work 140 jobs in February, but actually worked 134 jobs.
Required:
Complete the 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 Monthe ended February 28
Revenue & Spending Variances
Activity Variances
Revenue
Expenses:
Technician Wages
Mobile lab Operating expenses
Office expenses
Advertising expenses
Insurance
Miscellaneous expenses
Total expense
Net operating income
Fixed Component per Month
Variable Component per job
Actual Total for February
Revenue
$276
$35,890
Technician Wages
$8,400
$8,250
Mobile lab Operating Expenses
$4,800
$28
$8,880
Office expenses
$2,300
$3
$2,570
Advertising expenses
$1,560
$1,630
Insurance
$2,850
$2,850
Miscellaneous expenses
$930
$2
$515
Explanation / Answer
(All values in $ other than specified) Fixed Component per Month Variable Component per job Actual Total for February Budgeted Total for February Total Variance Nature of Variance Budgeted Component Per Job Actual Component per Job Revenue & Spending Variances Nature of Variance Activity Variances Nature of Variance Revenue 276 35,890 38,640 2,750 U 276 267.8358209 1094 U 1656 U Technician Wages 8,400 8,250 8,400 150 F 8400 8250 150 F Mobile lab Operating Expenses 4,800 28 8,880 8,720 -160 U 62.28571429 66.26865672 -534 U 373.714286 F Office expenses 2,300 3 2,570 2,720 150 F 19.42857143 19.17910448 33.428571 F 116.571429 F Advertising expenses 1,560 1,630 1,560 -70 U -70 U Insurance 2,850 2,850 2,850 0 None None Miscellaneous expenses 930 2 515 1210 695 F 8.642857143 3.843283582 643.14286 F 51.8571429 F
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