Jake\'s Roof Repair has provided the following data concerning its costs ost per

Question

Jake's Roof Repair has provided the following data concerning its costs ost per Month 21,500 Wages and salaries Parts and supplies Equipment depreciation Truck operating expenses Rent Administrative expenses $2,78 $ 5,718 4,660 $ 3,850 Repair-Hour s 15.69 7.80 8.45 s 1.79 s e.58 For example, wages and salaries should be $21,500 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 $5400 per repair-hour Required: unfavorable, and "None" for no effect (Le., zero variance), Input all amounts as positive values,) ompany's activity variances for May (Indicate the effect of each variance by selecting "F" for favorable, "U" for Jake's Roof Repair Activity Variances For the Month Ended May 31 Revenue Expenses

Explanation / Answer

Solution:

Computing the Company's Activity Variances for May:

Jake's Roof Repair

Activity Variances

For the Month Ended May 31

Jake's Roof Repair

Activity Variances

For the Month Ended May 31

Planning Budget Flexible Budget Activity Variance Repair Hours 2,500 2,400 Revenue (2,500 Hrs * $54) = $135,000 (2,400 Hrs * $54) = $129,600 $5,400 U Expenses: Wages and Salaries ($21,500+[2,500 * $15]) = $59,000 ($21,500+[2,400 * $15]) = $57,500 $1,500 U Parts and Supplies (2,500 * $7.80) = $19,500 (2,400 * $7.80) = $18,720 $780 U Equipment Depreciation ($2,780+[2,500 * $0.45]) = $3,905 ($2,780+[2,400 * $0.45]) = $3,860 $45 U Truck Operating Expenses ($5,710+[2,500 * $1.70]) = $9,960 ($5,710+[2,400 * $1.70]) = $9,790 $170 U Rent $4,660 $4,660 - - Administrative Expenses ($3,850+[2,500 * $0.50]) = $5,100 ($3,850+[2,400 * $0.50]) = $5,050 $50 U Total Expenses $102,125 $99,580 $2,545 U Net Oeprating Income $32,875 $30,020 $2,855 U

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