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

Question

AirAssurance 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 $29 per job, and the actual mobile lab operating expenses for March were $9,020. The company expected to work 140 jobs in March, but actually worked 138 jobs. Required: Complete the flexible budget performance report showing AirAssurance Corporation's activity variances and revenue and spending variances for March.

Explanation / Answer

Cost formula Actual Results Flexible Budget Flexible Budget variance (actual - flexible) Static Budget Spending variance (flexible - static) Number of jobs 138 138 140 Sales Revenue $275Q $ 35,750.00 $ 37,950.00 $ -2,200.00 U $ 38,500.00 $ -550.00 U technical wages $8400 $   8,250.00 $   8,400.00 $     -150.00 F $   8,400.00 $            -   mobile lab operating expenses $29Q + $4800 $   9,020.00 $   8,802.00 $      218.00 U $   8,860.00 $   -58.00 F office expenses $2Q + $2300 $   2,430.00 $   2,576.00 $     -146.00 F $   2,580.00 $      -4.00 Advertising expenses $1620 $   1,690.00 $   1,620.00 $         70.00 U $   1,620.00 $            -   Insurance $2850 $   2,850.00 $   2,850.00 $                -   $   2,850.00 $            -   Miscellaneous Expenses $2Q+970 $       555.00 $   1,246.00 $     -691.00 F $   1,250.00 $      -4.00 F Total expense $ 24,795.00 $ 25,494.00 $     -699.00 F $ 25,560.00 $   -66.00 F Net Operating Income $ 10,955.00 $ 12,456.00 $ -1,501.00 U $ 12,940.00 $ -484.00 U

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