Answered: ake’s Roof Repair has provided the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Jake’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				$	7.20
Equipment depreciation	$	2,740		$	0.45
Truck operating expenses	$	5,710		$	1.80
Rent	$	4,640
Administrative expenses	$	3,890		$	0.60

For example, wages and salaries should be $21,200 plus $15.00 per repair-hour. The company expected to work 2,800 repair-hours in May, but actually worked 2,700 repair-hours. The company expects its sales to be $51.00 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.)

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