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 $ 277 for February $ 38,800 Technician wages $ 8,400 $ 8,250 Mobile lab operating expenses $ 4,800 $ 31 $ 9,290 Office expenses $ 2,400 $ 2 $ 2,550 Advertising expenses $ 1,570 $ 1,640 Insurance $ 2,880 Miscellaneous expenses $ 960 $ 1 $ 2,880 $ 415 The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,800 plus $31 per job, and the actual mobile lab operating expenses for February were $9,290. The company expected to work 150 Jobs in February but actually worked 154 jobs. Required: Prepare a flexible budget performance report for February. Note: Indicate the effect of each varlance 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 For the Month Ended February 28 Jobs Actual Results 154 $ 38,800 Revenue Expenses: Technician wages 8,250 Mobile lab operating expenses 9,290 Office expenses 2,550 Advertising expenses 1,640 Insurance 2,880 Miscellaneous expenses Total expenses Net operating income 415 25,025 $ 13,775 Flexible Planning Budget Budget
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 $ 277 for February $ 38,800 Technician wages $ 8,400 $ 8,250 Mobile lab operating expenses $ 4,800 $ 31 $ 9,290 Office expenses $ 2,400 $ 2 $ 2,550 Advertising expenses $ 1,570 $ 1,640 Insurance $ 2,880 Miscellaneous expenses $ 960 $ 1 $ 2,880 $ 415 The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,800 plus $31 per job, and the actual mobile lab operating expenses for February were $9,290. The company expected to work 150 Jobs in February but actually worked 154 jobs. Required: Prepare a flexible budget performance report for February. Note: Indicate the effect of each varlance 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 For the Month Ended February 28 Jobs Actual Results 154 $ 38,800 Revenue Expenses: Technician wages 8,250 Mobile lab operating expenses 9,290 Office expenses 2,550 Advertising expenses 1,640 Insurance 2,880 Miscellaneous expenses Total expenses Net operating income 415 25,025 $ 13,775 Flexible Planning Budget Budget
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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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
Variable
Component Component per Actual Total
per Month
Revenue
Job
$ 277
for February
$ 38,800
Technician wages
$ 8,400
$ 8,250
Mobile lab operating expenses
$ 4,800
$ 31
$ 9,290
Office expenses
$ 2,400
$ 2
$ 2,550
Advertising expenses
$ 1,570
$ 1,640
Insurance
$ 2,880
Miscellaneous expenses
$ 960
$ 1
$ 2,880
$ 415
The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,800 plus
$31 per job, and the actual mobile lab operating expenses for February were $9,290. The company expected to work 150 Jobs in
February but actually worked 154 jobs.
Required:
Prepare a flexible budget performance report for February.
Note: Indicate the effect of each varlance 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
For the Month Ended February 28
Jobs
Actual
Results
154
$ 38,800
Revenue
Expenses:
Technician wages
8,250
Mobile lab operating expenses
9,290
Office expenses
2,550
Advertising expenses
1,640
Insurance
2,880
Miscellaneous expenses
Total expenses
Net operating income
415
25,025
$ 13,775
Flexible
Planning
Budget
Budget
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