Jake\'s Roof Repair has provided the following data concerning its costs: Fixed

Question

Jake's Roof Repair has provided the following data concerning its costs: Fixed Cost per Month $21,200 Wages and salaries Parts and supplies Equipment depreciation Truck operating expenses Rent Administrative expenses Cost per Repair-Hour $15.00 7.50 0.45 $1.80 $ 2,730 $ 5,770 $ 4,600 $ 3,880 $ 0.60 For example, wages and salaries should be $21,200 plus $15.00 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 $52.00 per repair-hour.

Explanation / Answer

Jake's Roof Repair Activity Variances For the Month Ended May 31 Flexible Budget Planning Budget Activity Variances Repair hours 2600 2500 Revenue 52*Repair hours 135200 130000 5200 U Expenses Wages and Salaries (21200+15*RH) 60200 58700 1500 F Parts and Supplies (7.5*RH) 19500 18750 750 F Equipment Depriciation 2730+(.45*RH) 3900 3855 45 F Truck operating expenses (5770+1.8*RH) 10450 10270 180 F Rent 4600 4600 0 Administrative Expenses 3880+(.6*RH) 5440 5380 60 F Total Expense 104090 101555 2535 F Net Operating Income 31110 28445 2665 U

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