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 $4,900 plus $29 per job, and the actual mobile lab operating expenses for February were $7,960.

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    $ 278      $ 25,050       Technician wages $ 8,400            $ 8,250       Mobile lab operating expenses $ 4,900       $ 29      $ 7,960       Office expenses $ 2,400       $ 2      $ 2,450       Advertising expenses $ 1,620       $ 1,690       Insurance $ 2,890       $ 2,890       Miscellaneous expenses $ 970       $ 1      $ 375    

Explanation / Answer

Solution Particular Fixed Component Variable Total F/U/N (A) (B) C=A+B Acual Revenue 278*92=25576 25576 25050 U Technician wages 8,400 8400 8250 F Mobile lab operating expenses 4900 29*92=2668 7568 7,960 U Office expenses 2,400 2*92=184 2584 2450 F Advertising expenses 1,620 1620 1690 U Insurance 2890 2890 2890 N Miscellaneous expenses 970 1*92=92 1062 375 U

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