Wednesday, 1 April 2015

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

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


  Fixed Cost
per Month
  Cost per Repair-Hour
  Wages and salaries   $ 20,600        $ 15.00    
  Parts and supplies           $ 7.00    
  Equipment depreciation   $ 2,770        $ 0.45    
  Truck operating expenses   $ 5,790        $ 1.90    
  Rent   $ 4,610               
  Administrative expenses   $ 3,850        $ 0.70    

  

For example, wages and salaries should be $20,600 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 $47.00 per repair-hour.
  

Required:
Compute the company’s activity variances for May.


 save image

Explanation:
Jake’s Roof Repair
Activity Variances
For the Month Ended May 31
  Flexible Budget Planning Budget Activity Variances
  Repair-hours (q)   2,400         2,500        
  Revenue ($47.00q)  $ 112,800       $ 117,500    $ 4,700    U
 





 
  Expenses:              
     Wages and salaries ($20,600 + $15.00q)   56,600        58,100     1,500    F
     Parts and supplies ($7.00q)   16,800        17,500     700    F
     Equipment depreciation ($2,770 + $0.45q)   3,850        3,895     45    F
     Truck operating expenses ($5,790 + $1.90q)   10,350        10,540     190    F
     Rent ($4,610)   4,610        4,610     0    None
     Administrative expenses ($3,850 + $0.70q)   5,530        5,600     70    F
 





 
  Total expense   97,740        100,245     2,505    F
 





 
  Net operating income  $ 15,060       $ 17,255    $ 2,195    U
 











 


2 comments:

  1. Get a quote from the top subcontractors in Vancouver, Our crews do work for all the roofing contractors. Now get the same crews they hire to do your home for less money while getting the same service that you get from the big guys. We will get you several roofing quotes from roofing contractors that have all the insurance and skills so you have piece of mind. Join in with the roofing contractors that buy in bulk to pass of savings to you. If you want more info click here link : Roof repair

    ReplyDelete
  2. Great post, and great website. Thanks for the information! https://www.watertightworthingroofing.co.uk

    ReplyDelete