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 | $ | 27,610 | |||||
| Technician wages | $ | 8,200 | $ | 8,050 | |||||
| Mobile lab operating expenses | $ | 4,800 | $ | 31 | $ | 8,050 | |||
| Office expenses | $ | 2,500 | $ | 3 | $ | 2,680 | |||
| Advertising expenses | $ | 1,590 | $ | 1,660 | |||||
| Insurance | $ | 2,870 | $ | 2,870 | |||||
| Miscellaneous expenses | $ | 950 | $ | 1 | $ | 365 | |||
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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 $8,050. The company expected to work 110 jobs in February, but actually worked 112 jobs.
Required: Prepare a flexible budget performance report showing AirQual Test Corporations 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.)
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Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen
15th edition
77861612, 1259194078, 978-0077861612, 978-1259194078
