Question

Jake's Roof Repair has provided the following data concerning its costs: Fixed Cost Cost per per MonthRepair-Hour Wages and salaries Parts and supplies Equipment depreciation Truck operating expenses Rent Administrative expenses $15.00 $ 7.80 ş 0.50 $ 1.80 $21,000 $ 2,710 $ 5,770 $ 4,690 $ 3,900 $ 0.50 For example, wages and salaries should be $21,000 plus $15.00 per repair-hour. The company expected to work 2,500 repair-hours in May, but actually worked 2,400 repair-hours. The company expects its sales to be $48.00 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

Jake's Roof Repair
Activity variance
For the month ending May 31
	Flexible Budget	Planning budget	Activity variances	Conclusion
Repair-hours	2400	2500	100	Unfavorable
Revenue	115200	120000	4800	Unfavorable
Expenses
Wages and salaries	57000	58500	1500	Favorable
Parts and supplies	18720	19500	780	Favorable
Equipment Depreciation	3910	3960	50	Favorable
Truck operating expenses	10090	10270	180	Favorable
Rent	4690	4690		No effect
Administrative expenses	5100	5150	50	Favorable
Total expenses	99510	102070	2560	Favorable
Net operating income	15690	17930	2240	Unfavorable