Question

Exercise 9-8 Flexible Budgets and Activity Variances (LO9-1, LO9-2] Jake's Roof Repair has provided the following data concerning its costs: Fixed Cost per Month $ 21,200 Wages and salaries Parts and supplies Equipment depreciation Truck operating expenses Rent Administrative expenses Cost per Repair-Hour $ 16.00 $ 7.20 $ 0.50 $ 1.60 $ 2,780 $ 5,760 $ 4,680 $ 3,880 $ 0.70 For example, wages and salaries should be $21,200 plus $16.00 per repair-hour. The company expected to work 3,000 repair-hours in May, but actually worked 2,900 repair-hours. The company expects its sales to be $51.00 per repair-hour. Required: Compute the company's activity variances for May (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.) Jake's Roof Repair Activity Variances For the Month Ended May 31 Revenue Expenses: Wages and salaries Parts and supplies Equipment depreciation Truck operating expenses Rent Administrative expenses Total expense Net operating income

Answer 1

Activity variance

Revenue	5100 U
Expenses
Wages and salaries	1600 F
Parts and supplies	720 F
Equipment depreciation	50 F
Truck operating expenses	160 F
Rent	0 None
Administrative expenses	70 F
Total expense	2600 F
Net operating income	2500 U