Question

Jake’s Roof Repair has provided the following data concerning its costs: Fixed Cost per Month Cost per Repair-Hour Wages and salaries $ 20,900 $ 16.00 Parts and supplies $ 7.40 Equipment depreciation $ 2,700 $ 0.50 Truck operating expenses $ 5,780 $ 1.70 Rent $ 4,610 Administrative expenses $ 3,810 $ 0.50 For example, wages and salaries should be $20,900 plus $16.00 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 Variances
	For the Month Ended May 31
	Flexible Budget	Planning Budget	Activity variances
Revenue	115200	120000	4800	U
Expenses:
Wages and salaries	59300	60900	1600	F
Parts and supplies	17760	18500	740	F
Equipment depreciation	3900	3950	50	F
Truck operating expenses	9860	10030	170	F
Rent	4610	4610	0	None
Administrative expenses	5010	5060	50	F
Total expense	100440	103050	2610	F
Net operating income	14760	16950	2190	U