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Air Qual Test Corporation provides on-site air quality testing services. The company has provided the following cost formulas and actual results for the month of February. Revenue Technician wages Mobile lab operating expenses office expenses Advertising expenses Insurance Miscellaneous expenses Jobs Revenue Expenses: The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4.500 plus $35 per job, and the actual mobile lab operating expenses for February were $9,240. The company expected to work 140 jobs in February, but actually worked 146 jobs. Technician wages Mobile lab operating Required: Prepare a 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.) expenses Office expenses Advertising expenses Insurance Miscellaneous expenses Total expense Net operating income Actual Results 146 Fixed Component per Month $ 35,890 $ 8,600 $ 4,500 $ 2,700 $ 1,560 $ 2,880 $ 940 8,450 9,240 2,970 1,630 Variable Actual Total Component per Job for February $276 $35,890 $8,450 $ 9,240 $ 2,970 $1,630 $ 2,880 525 $ AirQual Test Corporation Flexible Budget Performance Report For the Month Ended February 28 Flexible Budget 2,880 525 25,695 $ 10,195 $35 $3 Planning Budget

Air Qual Test Corporation provides on-site air quality testing services. The company has provided the following cost formulas and actual results for the month of February. Revenue Technician wages Mobile lab operating expenses office expenses Advertising expenses Insurance Miscellaneous expenses Jobs Revenue Expenses: The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4.500 plus $35 per job, and the actual mobile lab operating expenses for February were $9,240. The company expected to work 140 jobs in February, but actually worked 146 jobs. Technician wages Mobile lab operating Required: Prepare a 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.) expenses Office expenses Advertising expenses Insurance Miscellaneous expenses Total expense Net operating income Actual Results 146 Fixed Component per Month $ 35,890 $ 8,600 $ 4,500 $ 2,700 $ 1,560 $ 2,880 $ 940 8,450 9,240 2,970 1,630 Variable Actual Total Component per Job for February $276 $35,890 $8,450 $ 9,240 $ 2,970 $1,630 $ 2,880 525 $ AirQual Test Corporation Flexible Budget Performance Report For the Month Ended February 28 Flexible Budget 2,880 525 25,695 $ 10,195 $35 $3 Planning Budget

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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### AirQual Test Corporation: Financial Analysis and Budget Performance **Overview:** AirQual Test Corporation provides on-site air quality testing services. Below is an analysis of the corporation's financials for the month of February, including fixed and variable cost formulas, actual results, and budget comparisons. **Cost Formulas and Actual Results:** | Expense | Fixed Component (per Month) | Variable Component (per Job) | Total for February | |-------------------------------------|-----------------------------|------------------------------|-------------------------| | Revenue | - | $276 | $35,890 | | Technician wages | $6,600 | $62 | $8,450 | | Mobile lab operating expenses | $4,500 | $35 | $9,240 | | Office expenses | $1,500 | $7 | $2,522 | | Advertising expenses | $800 | $3 | $1,230 | | Insurance | $500 | $1 | $646 | | Miscellaneous expenses | $980 | $2 | $1,272 | **Activity Measure:** - The company uses the number of jobs as its measure of activity. - Expected jobs for February: 140 - Actual jobs completed: 146 **Flexible Budget Performance Report:** The flexible budget performance report compares the actual results against both the flexible budget (based on actual activity level) and the planning budget. | | Actual Results | Flexible Budget | Planning Budget | |------------------------------------|----------------|-----------------|-----------------| | **Jobs** | 146 | | 140 | | **Revenue** | $35,890 | | | | **Expenses** | | | | | Technician wages | $8,450 | | | | Mobile lab operating expenses | $9,240 | | | | Office expenses | $2,522 | | | | Advertising expenses | $1,230 | | | | Insurance | $646 | | | | Miscellaneous expenses | $1,272 | | | | **Total expenses** | | | | | **Net operating income** | $10,195 | | | **Instructions:
Transcribed Image Text:### AirQual Test Corporation: Financial Analysis and Budget Performance **Overview:** AirQual Test Corporation provides on-site air quality testing services. Below is an analysis of the corporation's financials for the month of February, including fixed and variable cost formulas, actual results, and budget comparisons. **Cost Formulas and Actual Results:** | Expense | Fixed Component (per Month) | Variable Component (per Job) | Total for February | |-------------------------------------|-----------------------------|------------------------------|-------------------------| | Revenue | - | $276 | $35,890 | | Technician wages | $6,600 | $62 | $8,450 | | Mobile lab operating expenses | $4,500 | $35 | $9,240 | | Office expenses | $1,500 | $7 | $2,522 | | Advertising expenses | $800 | $3 | $1,230 | | Insurance | $500 | $1 | $646 | | Miscellaneous expenses | $980 | $2 | $1,272 | **Activity Measure:** - The company uses the number of jobs as its measure of activity. - Expected jobs for February: 140 - Actual jobs completed: 146 **Flexible Budget Performance Report:** The flexible budget performance report compares the actual results against both the flexible budget (based on actual activity level) and the planning budget. | | Actual Results | Flexible Budget | Planning Budget | |------------------------------------|----------------|-----------------|-----------------| | **Jobs** | 146 | | 140 | | **Revenue** | $35,890 | | | | **Expenses** | | | | | Technician wages | $8,450 | | | | Mobile lab operating expenses | $9,240 | | | | Office expenses | $2,522 | | | | Advertising expenses | $1,230 | | | | Insurance | $646 | | | | Miscellaneous expenses | $1,272 | | | | **Total expenses** | | | | | **Net operating income** | $10,195 | | | **Instructions:
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