Question

# Jake’s Roof Repair has provided the following data concerning its costs: Fixed Cost per Month Cost...

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

 Fixed Cost per Month Cost per Repair-Hour Wages and salaries \$ 20,700 \$ 15.00 Parts and supplies \$ 7.50 Equipment depreciation \$ 2,710 \$ 0.40 Truck operating expenses \$ 5,720 \$ 1.50 Rent \$ 4,630 Administrative expenses \$ 3,870 \$ 0.80

For example, wages and salaries should be \$20,700 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 \$53.00 per repair-hour.

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.)

 ACTIVITY VARIANCE Planning Budget Flexible Budget Variance Revenue 2500*53= 132500 2400*53= 127200 5300 U Expenses: Wages and salaries 20700+(15*2500)= 58200 20700+(15*2400)= 56700 1500 F Parts and supplies 2500*7.5= 18750 2400*7.5= 18000 750 F Equipment depreciation 2710+(.40*2500)= 3710 2710+(.40*2400)= 3670 40 F Truck operating expenses 5720+(1.50*2500)= 9470 5720+(1.5*2400)= 9320 150 F Rent 4630 4630 0 no effect Administrative expenses 3870+(.80*2500)= 5870 3870+(.80*2400)=5790 80 F Total expense 100630 98110F 2520 F Net operating income 31870 29090 2780 U

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