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 Variable Component Component per Actual Total per Month Revenue Job $ 276 for February $ 27,610 Technician wages $ 8,500 $ 8,350 Mobile lab operating expenses $ 4,600 $ 31 $ 7,850 Office expenses $ 2,700 $ 2 $ 2,770 Advertising expenses $ 1,550 $ 1,620 Insurance Miscellaneous expenses $2,870 $ 970 $ 1 $ 2,870 $ 385 The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,600 plus $31 per job, and the actual mobile lab operating expenses for February were $7,850. The company expected to work 110 jobs in February but actually worked 118 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 (i.e., zero variance). Input all amounts as positive values.
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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