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 $28 per job, and the actual mobile lab operating expenses for February were $8,600. The company expected to work 130 jobs in February, but actually worked 122 jobs. Required: Complete the flexible budget performance report showing AirQual Test Corporation's revenue and spending variances and activity variances for February.

Explanation / Answer

Fixed componenet per month Variable component per job bugeted total variable cost (130 jobs) Budgeted total cost Actual total cost (120 jobs) Variance Activity variance Revenue $279 $36,270 $36,270 $33,520 $2,750 $0.33 Technician wages $8,200 $0 $8,200 $8,050 $150 mobile lab operating expenses $4,800 $28 $3,640 $8,440 $8,600 ($160) $3.67 Office expenses $2,600 $2 $260 $2,860 $2,710 $150 ($1.08) Advertisement charges $1,560 $0 $1,560 $1,630 ($70) Insurance $2,860 $0 $2,860 $2,860 $0 Misc expenses $940 $2 $36,270 $37,210 $505 $36,705

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