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.

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