For example, wages and salaries should be $23,200 plus $16.30 per repair-hour. The company expected to work 2,800 repair-hours in May, but actually worked 2,900 repair-hours. The company expects its sales to be $44.50 per repair-hour.
Required:
Prepare a report showing the company's activity variances for May. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Omit the "$" sign in your response.)
Jake's Roof Repair
Activity Variances
For the Month Ended May 31
Activity Variances
Revenue
$
1 (0%)
F (6%)
Expenses:
Wages and salaries
1 (0%)
F (0%)
Parts and supplies
1 (0%)
U (6%)
Equipment depreciation
1 (0%)
None (0%)
Truck operating expenses
1 (0%)
U (6%)
Rent
1 (0%)
U (0%)
Administrative expenses
1 (0%)
F (0%)
Total expense
1 (0%)
None (0%)
Net operating income
$
1 (0%)
F (6%)
Exercise 10-14 Flexible Budgets and Activity Variances[LO1, LO2]
Jake's Roof Repair has provided the following data concerning its costs:
Fixed Cost
Per Month
Cost per
Repair-Hour
Wages and salaries
$
23,200
$
16.30
Parts and supplies
$
8.60
Equipment depreciation
$
1,600
$
0.40
Truck operating expenses
$
6,400
$
1.70
Rent
$
3,480
Administrative expenses
$
4,500
$
0.80
For example, wages and salaries should be $23,200 plus $16.30 per repair-hour. The company expected to work 2,800 repair-hours in May, but actually worked 2,900 repair-hours. The company expects its sales to be $44.50 per repair-hour.
Required:
Prepare a report showing the company's activity variances for May. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Omit the "$" sign in your response.)
Jake's Roof Repair
Activity Variances
For the Month Ended May 31
