Question

Jake’s Roof Repair has provided the following data concerning its costs: Fixed Cost per Month Cost per Repair-Hour Wages and salaries $ 21,100 $ 16.00 Parts and supplies $ 7.00 Equipment depreciation $ 2,760 $ 0.35 Truck operating expenses $ 5,770 $ 1.70 Rent $ 4,670 Administrative expenses $ 3,840 $ 0.70 For example, wages and salaries should be $21,100 plus $16.00 per repair-hour. The company expected to work 2,600 repair-hours in May, but actually worked 2,500 repair-hours. The company expects its sales to be $47.00 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.)

Answer 1

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
Revenue	4700 U
Expense
Wages and salaries	1600 F
Parts and supplies	700 F
Equipment depreciation	35 F
Truck operating expense	170 F
Rent	0 NOne
Administrative expenses	70 F
Total expense	2575 F
Net operating income	2125 U