Creating flexible budget performance report


Response to the following problem:

AirAssurance Corporation provides on-site air quality testing services. The company has provided the following data concerning its operations:

                                     Fixed Component per Month       Variable Component per job          Actual Total for March

Revenue                                                                                $275                                    $24,750

Technician wages                       $8,600                                                                               $8,450

Mobile lab operating expenses       $4,900                                     $29                                     $7,960

Office expenses                          $2,700                                     $3                                      $2,850

Advertising expenses                   $1,580                                                                               $1,650

Insurance                                 $2,870                                                                                $2,870

Miscellaneous expenses                $960                                         $2                                      $465

The company uses the number of jobs as it measures of activity. For example, mobile lab operating expenses should be $4,900 plus $29 per job, and the actual mobile lab operating expenses for March were $7,960.

The company expected to work 100 jobs in March, but actually worked 98 jobs.

Prepare a flexible budget performance report showing AirAssurance Corporation's activity variances and revenue and spending variances for March.

Explain the answer.

Solution Preview :

Prepared by a verified Expert
Managerial Accounting: Creating flexible budget performance report
Reference No:- TGS02081670

Now Priced at $20 (50% Discount)

Recommended (98%)

Rated (4.3/5)