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Jake’s Roof Repair has provided the following data concerningits costs:Fixed Costper MonthCost...Jake’s Roof Repair...

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Accounting

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

Fixed Cost
per Month		Cost per
Repair-Hour
Wages andsalaries$20,900$15.00
Parts andsupplies$7.60
Equipmentdepreciation$2,790$0.55
Truck operatingexpenses$5,790$1.80
Rent$4,660
Administrativeexpenses$3,890$0.70

For example, wages and salaries should be $20,900 plus $15.00per repair-hour. The company expected to work 3,000 repair-hours inMay, but actually worked 2,900 repair-hours. The company expectsits 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" forfavorable, "U" for unfavorable, and "None" for no effect (i.e.,zero variance). Input all amounts as positive values.)

Answer & Explanation Solved by verified expert
3.9 Ratings (651 Votes)

Jake's Roof Repair
Activity Variances
For the month ended May 31
$
Revenue                      4,800.00 U
Expenses:
Wages and Salaries                      1,500.00 F
Parts and supplies                          760.00 F
Equipment depreciation                            55.00 F
Truck Operating Expenses                          180.00 F
Rent                                   -   None
Administrative Expenses                            70.00 F
Total Expense                      2,565.00 F
Net Operating Income                      2,235.00 U
Explanations
Jake's Roof Repair
Activity Variances
For the month ended May 31
Planning Budget Flexible Budget Activity Variances
($) ($)
Repairs - hours (q)                      3,000.00                     2,900.00
Revenue (48*q)                  144,000.00                 139,200.00                         4,800.00 U
Expenses:
Wages and Salaries [20,900+(15*q)]                    65,900.00                   64,400.00                         1,500.00 F
Parts and supplies (7.60*q)                    22,800.00                   22,040.00                            760.00 F
Equipment depreciation [2,790+(0.55*q)]                      4,440.00                     4,385.00                               55.00 F
Truck Operating Expenses [5,790+(1.80*q)]                    11,190.00                   11,010.00                            180.00 F
Rent                      4,660.00                     4,660.00                                      -   None
Administrative Expenses [3,890+(0.70*q)]                      5,990.00                     5,920.00                               70.00 F
Total Expense                  114,980.00                 112,415.00                         2,565.00 F
Net Operating Income                    29,020.00                   26,785.00                         2,235.00 U

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In: AccountingJake’s Roof Repair has provided the following data concerningits costs:Fixed Costper MonthCost...Jake’s Roof Repair has provided the following data concerningits costs:Fixed Costper MonthCost perRepair-HourWages andsalaries$20,900$15.00Parts andsupplies$7.60Equipmentdepreciation$2,790$0.55Truck operatingexpenses$5,790$1.80Rent$4,660Administrativeexpenses$3,890$0.70For example, wages and salaries should be $20,900 plus $15.00per repair-hour. The company expected to work 3,000 repair-hours inMay, but actually worked 2,900 repair-hours. The company expectsits 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" forfavorable, "U" for unfavorable, and "None" for no effect (i.e.,zero variance). Input all amounts as positive values.)

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