Question

AirQual Test Corporation provides on-site air quality testing services. The company has provided the following data concerning its operations:

	Fixed Component per Month		Variable Component per Job		Actual Total for February
Revenue			$	276	$	27,610
Technician wages	$	8,200			$	8,050
Mobile lab operating expenses	$	4,900	$	29	$	8,250
Office expenses	$	2,300	$	4	$	2,590
Advertising expenses	$	1,570			$	1,640
Insurance	$	2,890			$	2,890
Miscellaneous expenses	$	980	$	1	$	395

The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,900 plus $29 per job, and the actual mobile lab operating expenses for February were $8,250.

The company expected to work 110 jobs in February, but actually worked 106 jobs.

Required:

Complete the 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.)

2. AirQual Test Corporation provides on-site air quality testing services. The company has provided the following data concerning its operations: Fixed Component per Month Variable Component per Job Actual Total for February   Revenue    $ 276      $ 27,610       Technician wages $ 8,200            $ 8,050       Mobile lab operating expenses $ 4,900       $ 29      $ 8,250       Office expenses $ 2,300       $ 4      $ 2,590       Advertising expenses $ 1,570       $ 1,640       Insurance $ 2,890       $ 2,890       Miscellaneous expenses $ 980       $ 1      $ 395     The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,900 plus $29 per job, and the actual mobile lab operating expenses for February were $8,250.      The company expected to work 110 jobs in February, but actually worked 106 jobs. Required: Complete the 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.)

Answer 1

1)
	Fixed Component per Month	Variable Component per Job	Actual Total for February	Flexible Budget	Spending Variance	F/U	Planning Budget	Activity Varaince	F/U
Jobs			106	106			110
Revenue		276.00	27,610.00	29,256.00	1,646.00	U	30,360.00	1,104.00	U
Technician wages	8,200.00		8,050.00	8,200.00	150.00	F	8,200.00	-
Mobile lab operating expenses	4,900.00	29.00	8,250.00	7,974.00	276.00	U	8,090.00	116.00	F
Office expenses	2,300.00	4.00	2,590.00	2,724.00	134.00	F	2,740.00	16.00	F
Advertising expenses	1,570.00		1,640.00	1,570.00	70.00	U	1,570.00	-
Insurance	2,890.00		2,890.00	2,890.00	-		2,890.00	-
Miscellaneous expenses	980.00	1.00	395.00	1,086.00	691.00	F	1,090.00	4.00	F
Total expenses			23,815.00	24,444.00	629.00	F	24,580.00	136.00	F
Net income			3,795.00	4,812.00	1,017.00	U	5,780.00	968.00	U
2)
	Fixed Component per Month	Variable Component per Job	Actual Total for February	Flexible Budget	Spending Variance	F/U	Planning Budget	Activity Varaince	F/U
Jobs			106	106			110
Revenue		276.00	27,610.00	29,256.00	1,646.00	U	30,360.00	1,104.00	U
Technician wages	8,200.00		8,050.00	8,200.00	150.00	F	8,200.00	-
Mobile lab operating expenses	4,900.00	29.00	8,250.00	7,974.00	276.00	U	8,090.00	116.00	F
Office expenses	2,300.00	4.00	2,590.00	2,724.00	134.00	F	2,740.00	16.00	F
Advertising expenses	1,570.00		1,640.00	1,570.00	70.00	U	1,570.00	-
Insurance	2,890.00		2,890.00	2,890.00	-		2,890.00	-
Miscellaneous expenses	980.00	1.00	395.00	1,086.00	691.00	F	1,090.00	4.00	F
Total expenses			23,815.00	24,444.00	629.00	F	24,580.00	136.00	F
Net income			3,795.00	4,812.00	1,017.00	U	5,780.00	968.00	U