Fixed Component Variable Component Actual Total per Month per Job for February
Revenue $277 $33,260
Technician wages $8,400 $8,250
Mobile lab operating
expenses $4,700 $32 $8,700
Office expenses $2,400 $2 $2,510
Advertising expenses $1,580 $1,650
Insurance $2,890 $2,890
Miscellaneous expenses $920 $1 $355
The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,900 plus $32 per job, and the actual mobile lab operating expenses for February were $9,220. The company expected to work 140 jobs in February, but actually worked 148 jobs.
Required:
Prepare a flexible budget performance report showing AirQual Test Corporation's revenue and spending variances and activity variances for February.
AirQual Test Corporation
Flexible Budget Performance Report
For the Month Ended February 28
Actual Revenue and Flexible Activity Planning
Results Spending Budget Variances Budget
Variances
Jobs 148 148 140
Revenue $36,310
Expenses:
Technician wages 8,050
Mobile lab operating
expenses 9,220
Office expenses 2,770
Advertising expenses 1,630
Insurance 2,890
Miscellaneous
expenses 515
Total expense 25,075
Net operating income11,235