Question

Jake’s Roof Repair has provided the following data concerning its costs: Fixed Cost per Month Cost per Repair-Hour Wages and salaries $ 20,800 $ 15.00 Parts and supplies $ 7.50 Equipment depreciation $ 2,710 $ 0.30 Truck operating expenses $ 5,750 $ 1.60 Rent $ 4,670 Administrative expenses $ 3,810 $ 0.70 For example, wages and salaries should be $20,800 plus $15.00 per repair-hour. The company expected to work 2,600 repair-hours in May, but actually worked 2,500 repair-hours. The company expects its sales to be $52.00 per repair-hour. Required: Compute the company’s activity variances for May.

Answer 1

Requirement 1 Jakes Roof Repair Activity Variance For the month ended May 31 Planning Budget Flexible Budget $ 135,200.00 $ 130,000.00 Activity Variances $ 5,200.00 U Revenue Expenses : Wages and salaries parts and supplies Equipment Depreciation Truck operating expenses Rent Administrative expenses Total Expense Net Operating income $ $ $ $ U Unfavourable F Favourable None No Effect 59,800.00 19,500.00 3,490.00 9,910.00 4,670.00 5,630.00 103,000.00 32,200.00 $ $ $ $ $ $ $ $ 58,300.00 18,750.00 3,460.00 9,750.00 4,670.00 5,560.00 100,490.00 29,510.00 $ $ $ $ $ $ 1,500.00 F 750.00 F 30.00 F 160.00 F - None 70.00 F 2,510.00 F 2,690.00 U $ $ 2600*52 2500*52 Working : Revenue Expenses : Wages and salaries parts and supplies Equipment Depreciation Truck operating expenses Rent Administrative expenses 20800+2600*15 2600*7.5 2710+2600*0.3 5750+2600*1.6 $ 4,670.00 3810+2600*0.7 20800+2500*15 2500*7.5 2710+2500*0.3 5750+2500*1.6 $ 4,670.00 3810+2500*0.7 Note : Only Yellow Colour part is solution you should fill that in the blanks