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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.)

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.)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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: Revenue Technician vages Mobile lab operating expenses office expenses Advertising expenses Insurance Miscellaneous expenses Jobs Revenue Expenses: Technician wages Mobile lab operating expenses Office expenses Fixed Component per Month Advertising expenses Insurance $ 8.200 $4,500 $ 2,300 $1,610 $ 2,850 $980 Miscellaneous expenses Total expense Net operating income 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 $8,890. The company expected to work 130 jobs in February, but actually worked 138 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.) Variable Component per Job $ 280 Actual Results $ 35 $3 138 $ 33,650 $1 8,050 8,890 2,540 1,680 2,850 415 24,425 $ 9,225 AirQual Test Corporation Flexible Budget Performance Report For the Month Ended February 28 Actual Total for February $ 33,650 $ 8,050 $8,890 $ 2,540 $1,680 $ 2,850 $415 Revenue and Spending Variances F U None F F Flexible Budget 138 $ 38,640 8,200 9,330 2,714 1,610 2,850 1,118 25,822 Activity Variances None U U None None U U Planning Budget $ 130 36,400
Transcribed Image Text: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: Revenue Technician vages Mobile lab operating expenses office expenses Advertising expenses Insurance Miscellaneous expenses Jobs Revenue Expenses: Technician wages Mobile lab operating expenses Office expenses Fixed Component per Month Advertising expenses Insurance $ 8.200 $4,500 $ 2,300 $1,610 $ 2,850 $980 Miscellaneous expenses Total expense Net operating income 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 $8,890. The company expected to work 130 jobs in February, but actually worked 138 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.) Variable Component per Job $ 280 Actual Results $ 35 $3 138 $ 33,650 $1 8,050 8,890 2,540 1,680 2,850 415 24,425 $ 9,225 AirQual Test Corporation Flexible Budget Performance Report For the Month Ended February 28 Actual Total for February $ 33,650 $ 8,050 $8,890 $ 2,540 $1,680 $ 2,850 $415 Revenue and Spending Variances F U None F F Flexible Budget 138 $ 38,640 8,200 9,330 2,714 1,610 2,850 1,118 25,822 Activity Variances None U U None None U U Planning Budget $ 130 36,400
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