The Exterminator Inc. provides on-site residential pest extermination services. The company has several mobile teams who are dispatched from a central location in company - owned trucks. The company uses the number of jobs to measure activity. At the beginning of May, the company budgeted for 200 job , but the actual number of job, turned out to be 208. A report comparing the budgeted revenues and costs to the actual revenues and costs appears below:
The Exterminator Inc. Variance Report For the Month Ended May 31 | |||
| Planning Budget | Actual Results | Variances |
Jobs | 200 | 208 |
|
Revenue | $37,000 | $ 36,400 | $ 600 U |
Expenses: | |||
Mobile team operating costs | 16,900 | 17,060 | 160U |
Exterminating supplies | 4,000 | 4,350 | 350U |
Advertising | 900 | 1,040 | 140U |
Dispatching costs | 2,700 | 2,340 | 360F |
Office rent | 2,300 | 2,300 | 0 |
Insurance | 3,600 | 3,600 | 0 |
Total expense | 30,400 | 30,690 | 290U |
Net operating income | $6,600 | $5.710 | $ 890U |
Required:
Is the above variance report useful for evaluating how well revenues and costs were controlled during May ? Why or why not?
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