Question

Jake's Roof Repair has provided the following data concerning its costs: Fixed Cost per Month $ 21,100 Wages and salaries Parts and supplies Equipment depreciation Truck operating expenses Rent Administrative expenses Cost per Repair-Hour $15.00 $ 7.40 $ 0.45 $ 1.90 $ 2,730 $ 5,790 $ 4,660 $ 3,810 $ 0.50 For example, wages and salaries should be $21,100 plus $15.00 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

	Planning budget	Flexible budget	Activity variances
Revenue	153000	147900	5100	U
Expenses:
Wages and Salaries	66100	64600	1500	F
Parts and Supplies	22200	21460	740	F
Equipment Depreciation	4080	4035	45	F
Truck Operating expenses	11490	11300	190	F
Rent	4660	4660	0	None
Administrative expenses	5310	5260	50	F
Total expense	113840	111315	2525	F
Net Operating income	39160	36585	2575	U