Question

Jake’s Roof Repair has provided the following data concerning its costs:

	Fixed Cost per Month			Cost per Repair-Hour
Wages and salaries	$	20,500		$	15.00
Parts and supplies				$	7.30
Equipment depreciation	$	2,800		$	0.45
Truck operating expenses	$	5,760		$	1.60
Rent	$	4,630
Administrative expenses	$	3,870		$	0.70

For example, wages and salaries should be $20,500 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 $44.00 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

גרוזים 2400 44.00 20500 2400 2400 * 2400 2400 15.00 7.30 0.45 1.60 + 2800 5760 4630 3870 2400 0.70 + Jack Roof repairs Activty Varaince For the Year Ended May 31 Fexible Planning Budget Budget Activty Varaince Revenue 105600 110000 4400U Expenese Wages and Supplies 56500 58000 15001F Parts and Supplies 17520 18250730F Equipment Depreciation 3880392545 F Truck Operating Expenses 9600 9760 160 F Rent 4630 4630 0 None Administrative Expenses 5550 5620 70 F Total Expenses L 97680 100185 2505 F Net Operating Income 7920 9815 1895 U ANSWER Jack Roof repairs Activty Varaince For the Year Ended May 31 Service Revenue 4400 U Expenese Wages and Supplies 1500F Parts and Supplies 730 F Equipment Depreciation Truck Operating Expenses 160 F O None Administrative Expenses 70F Total Expenses 2505 F Operating Income 1895 U 45 F Rent