AirQual 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:   Fixed Component per Month Variable Component per Job Actual Total for February Revenue   $ 279 $ 39,100 Technician wages $ 8,400   $ 8,250 Mobile lab operating expenses $ 4,800 $ 34 $ 9,740 Office expenses $ 2,400 $ 3 $ 2,700 Advertising expenses $ 1,580   $ 1,650 Insurance $ 2,870   $ 2,870 Miscellaneous expenses $ 930 $ 2 $ 535   The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,800 plus $34 per job, and the actual mobile lab operating expenses for February were $9,740. The company expected to work 150 jobs in February, but actually worked 152 jobs.   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.)

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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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AirQual 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:

  Fixed Component per Month Variable Component per Job Actual Total for February
Revenue   $ 279 $ 39,100
Technician wages $ 8,400   $ 8,250
Mobile lab operating expenses $ 4,800 $ 34 $ 9,740
Office expenses $ 2,400 $ 3 $ 2,700
Advertising expenses $ 1,580   $ 1,650
Insurance $ 2,870   $ 2,870
Miscellaneous expenses $ 930 $ 2 $ 535

 

The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,800 plus $34 per job, and the actual mobile lab operating expenses for February were $9,740. The company expected to work 150 jobs in February, but actually worked 152 jobs.

 

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.)

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