ake’s Roof Repair has provided the following data concerning its costs: Fixed Co

Question

ake’s Roof Repair has provided the following data concerning its costs: Fixed Cost per Month Cost per Repair-Hour Wages and salaries $ 21,200 $ 15.00 Parts and supplies $ 7.30 Equipment depreciation $ 2,760 $ 0.40 Truck operating expenses $ 5,760 $ 1.70 Rent $ 4,680 Administrative expenses $ 3,890 $ 0.70 For example, wages and salaries should be $21,200 plus $15.00 per repair-hour. The company expected to work 3,000 repair-hours in May, but actually worked 2,900 repair-hours. The company expects its sales to be $53.00 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.)

Explanation / Answer

Compute the company’s activity variances for May.

Revenue 5300 U Expenses Wages and salaries 1500 F Parts and supplies 730 F Equipment depreciation 40 F Truck operating expenses 170 F Rent None Administrative expense 70 F Total Expenses 2510 F Net operating income 2790 U

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