Crimson 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 $350 $30,000 Technician Wages $8,000 $15 $9,800 Mobile lab operating expenses $3,000 $30 $5,500 Office expenses $2,000 $10 $2,800 Advertising expenses $1,000 $1,050 Insurance $1,650 $1,650 Miscellaneous expenses $1,200 $5 $1,600 The company uses the number of jobs as its measure of activity. The company expected to work 90 jobs in February, but actually worked 88 jobs. Prepare: A. Flexible Budget Performance Report

  Profit = $8,670

Explanation

A flexible budget is that prepare for the actual activity level achieved using the assumptions of the static budget.

So we will prepare a flexible budget for 88 jobs using the assumptions of the budget for 90 jobs

Crimson Test Corporation

FLEXIBLE BUDGET

                                                                                            $

Explanation:

Revenue  (88× $350)                                                       30,800

Technical wages    ( 88× $15)+8000   9320

Mobile operating (88×$30) +(3000     5640

Office expenses (88 × $10) + 2,000     2880

Advertising                                              1000

Insurance                                                1,650

Miscellaneous      (88 × $5) + 1200       1,640

Total expenditure                                                         (22,130)

    Profit                                                                            8,670

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