Question

PLEASE SHOW WORK SO I CAN LEARN HOW TO DO IT.

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 Variable Actual Total Component per Job for February per Month 276 Revenue 30,370 8,150 7,940 $ 2,730 $ 1,670 $ 2,900 Technician wages Mobile lab operating expenses Office expenses Advertising expenses 8,300 4,500 2,400 1,600 2,900 30 4 Insurance Miscellaneous expenses 960 385 The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,500 plus $30 per job, and the actual mobile lab operating expenses for February were $7,940. The company expected to work 120 jobs in February, but actually worked 128 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.)

Answer 1

Correct Answer:

AirQual Test Corporations
Flexible Budget Performance Report
For the month Ended February 28
	Actual Results	Revenues and spending variance		Flexible	Activity Variances		Planning budget
Jobs	128			128			120
	A	C =A-B		B	D =B-E		E
Revenue	$                30,370.00	$         (4,958.00)	U	$           35,328.00	$                2,208.00	F	$         33,120.00
Expenses		$                        -			$                             -
Technician wages	$                   8,150.00	$            (150.00)	F	$             8,300.00	$                             -	N	$           8,300.00
Mobile lab operating expenses	$                   7,940.00	$            (400.00)	F	$             8,340.00	$                   240.00	U	$           8,100.00
office expenses	$                   2,730.00	$            (182.00)	F	$             2,912.00	$                      32.00	U	$           2,880.00
Advertisement expenses	$                   1,670.00	$                 70.00	U	$             1,600.00	$                             -	N	$           1,600.00
Insurance	$                  2,900.00	$                        -	N	$             2,900.00	$                             -	N	$           2,900.00
Miscellaneous expenses	$                      385.00	$            (703.00)	F	$             1,088.00	$                        8.00	U	$           1,080.00
Total Expenses	$                23,775.00	$         (1,365.00)	F	$           25,140.00	$                   280.00	U	$         24,860.00
Net operating expenses	$                   6,595.00	$         (3,593.00)	U	$           10,188.00	$                1,928.00	F	$           8,260.00

Working:

	Formula	Flexible	formula	Planning budget
Jobs		128		120
Revenue	276*128	$           35,328.00	276*120	$            33,120.00
Expenses
Technician wages	fixed (8300)	$             8,300.00	fixed (8300)	$               8,300.00
Mobile lab operating expenses	4500+(128*30)	$             8,340.00	4500+(120*30)	$               8,100.00
office expenses	2400+(128*4)	$             2,912.00	2400+(120*4)	$               2,880.00
Advertisement expenses	Fixed(1600)	$             1,600.00	Fixed(1600)	$               1,600.00
Insurance	Fixed (2900)	$             2,900.00	Fixed (2900)	$               2,900.00
Miscellaneous expenses	960+(128*1)	$             1,088.00	960+(120*1)	$               1,080.00
Total Expenses	sum of all expenses	$           25,140.00	sum of all expenses	$            24,860.00
Net operating expenses	Revenue - total expenses	$           10,188.00	Revenue - total expenses	$               8,260.00

                                                                                                                                                                                          

End of answer.

Please give a thumbs-up, it will be highly appreciated.

Thanks.