Question
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:
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:
Fixed Component per Month | Variable Component per Job | Actual Total for February | |||||||
Revenue | $ | 276 | $ | 30,370 | |||||
Technician wages | $ | 8,200 | $ | 8,050 | |||||
Mobile lab operating expenses | $ | 4,600 | $ | 34 | $ | 8,520 | |||
Office expenses | $ | 2,600 | $ | 2 | $ | 2,690 | |||
Advertising expenses | $ | 1,580 | $ | 1,650 | |||||
Insurance | $ | 2,880 | $ | 2,880 | |||||
Miscellaneous expenses | $ | 970 | $ | 1 | $ | 395 | |||
The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,600 plus $34 per job, and the actual mobile lab operating expenses for February were $8,520. The company expected to work 120 jobs in February, but actually worked 128 jobs.
Required:
Prepare a flexible budget performance report showing AirQual Test Corporations revenue and spending variances and activity variances for February.
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