AirQual Test Corporation provides on-site air quality testing services. The company provided the following cost formulas and actual results for the month of February Fixed Component per Month Variable Component Revenue per Job $ 277 Actual Total for February $ 30,490 Technician wages $ 8,600 $ 8,450 Mobile lab operating expenses $ 4,600 $ 35 $ 8,640 Office expenses $ 2,600 $ 4 $ 2,930 Advertising expenses $ 1,570 $ 1,640 Insurance $ 2,980 Miscellaneous expenses $ 950 $ 2,880 $ 375 ences The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,600 plus $35 per job, and the actual mobile lab operating expenses for February were $8,640. The company expected to work 120 jobs in February but actually worked 124 jobs. Required: Prepare a flexible budget performance report for February. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (l.e., zero variance). Input all amounts as positive values. AirQual Test Corporation Flexible Budget Performance Report Jobs For the Month Ended February 28 Actual Results Revenue and Spending Variances Flexible Budget Activity Variances Planning Budget 124 $ 30,490 Revenue Expenses: Technician wages 8,450 Mobile lab operating expenses 8,640 Office expenses 2,930 Advertising expenses 1,640 Insurance 2,880 Miscellaneous expenses 375 Total expenses 24,915 Net operating income $ 5,575
AirQual Test Corporation provides on-site air quality testing services. The company provided the following cost formulas and actual results for the month of February Fixed Component per Month Variable Component Revenue per Job $ 277 Actual Total for February $ 30,490 Technician wages $ 8,600 $ 8,450 Mobile lab operating expenses $ 4,600 $ 35 $ 8,640 Office expenses $ 2,600 $ 4 $ 2,930 Advertising expenses $ 1,570 $ 1,640 Insurance $ 2,980 Miscellaneous expenses $ 950 $ 2,880 $ 375 ences The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,600 plus $35 per job, and the actual mobile lab operating expenses for February were $8,640. The company expected to work 120 jobs in February but actually worked 124 jobs. Required: Prepare a flexible budget performance report for February. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (l.e., zero variance). Input all amounts as positive values. AirQual Test Corporation Flexible Budget Performance Report Jobs For the Month Ended February 28 Actual Results Revenue and Spending Variances Flexible Budget Activity Variances Planning Budget 124 $ 30,490 Revenue Expenses: Technician wages 8,450 Mobile lab operating expenses 8,640 Office expenses 2,930 Advertising expenses 1,640 Insurance 2,880 Miscellaneous expenses 375 Total expenses 24,915 Net operating income $ 5,575
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Question
Transcribed Image Text:AirQual Test Corporation provides on-site air quality testing services. The company provided the following cost formulas and actual
results for the month of February
Fixed
Component
per Month
Variable
Component
Revenue
per Job
$ 277
Actual
Total for
February
$ 30,490
Technician wages
$ 8,600
$ 8,450
Mobile lab operating expenses
$ 4,600
$ 35
$ 8,640
Office expenses
$ 2,600
$ 4
$ 2,930
Advertising expenses
$ 1,570
$ 1,640
Insurance
$ 2,980
Miscellaneous expenses
$ 950
$ 2,880
$ 375
ences
The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,600 plus
$35 per job, and the actual mobile lab operating expenses for February were $8,640. The company expected to work 120 jobs in
February but actually worked 124 jobs.
Required:
Prepare a flexible budget performance report for February.
Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (l.e., zero
variance). Input all amounts as positive values.
AirQual Test Corporation
Flexible Budget Performance Report
Jobs
For the Month Ended February 28
Actual
Results
Revenue and
Spending Variances
Flexible
Budget
Activity Variances
Planning
Budget
124
$ 30,490
Revenue
Expenses:
Technician wages
8,450
Mobile lab operating expenses
8,640
Office expenses
2,930
Advertising expenses
1,640
Insurance
2,880
Miscellaneous expenses
375
Total expenses
24,915
Net operating income
$
5,575
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