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 | $ | 277 | $ | 33,260 | |||||
Technician wages | $ | 8,300 | $ | 8,150 | |||||
Mobile lab operating expenses | $ | 4,800 | $ | 34 | $ | 9,060 | |||
Office expenses | $ | 2,500 | $ | 3 | $ | 2,740 | |||
Advertising expenses | $ | 1,550 | $ | 1,620 | |||||
Insurance | $ | 2,870 | $ | 2,870 | |||||
Miscellaneous expenses | $ | 980 | $ | 1 | $ | 415 | |||
The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,800 plus $34 per job, and the actual mobile lab operating expenses for February were $9,060. The company expected to work 130 jobs in February, but actually worked 136 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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