2 Exercise 9-7 (Algo) Flexible Budgets and Activity Variances [LO9-1, LO9-2] Jake's Roof Repair provided the following data concerning its costs: Fixed Cost Cost per per Month Repair-Hour ook D int nt Wages and salaries Parts and supplies Equipment depreciation Truck operating expenses Rent Administrative expenses $ 20,900 $ 15.00 $ 7.20 $ 2,710 $ 0.60 $ 5,740 $ 1.70 $ 4,650 $ 3,880 $ 0.60 For example, wages,and salaries should be $20,900 plus $15.00 per repair-hour. The company expected to work 2,500 repair-hour in May but actually worked 2,400 repair-hours. The company expects its sales to be $48.00 per repair-hour. Required: Compute the company's activity variances for May. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero
2 Exercise 9-7 (Algo) Flexible Budgets and Activity Variances [LO9-1, LO9-2] Jake's Roof Repair provided the following data concerning its costs: Fixed Cost Cost per per Month Repair-Hour ook D int nt Wages and salaries Parts and supplies Equipment depreciation Truck operating expenses Rent Administrative expenses $ 20,900 $ 15.00 $ 7.20 $ 2,710 $ 0.60 $ 5,740 $ 1.70 $ 4,650 $ 3,880 $ 0.60 For example, wages,and salaries should be $20,900 plus $15.00 per repair-hour. The company expected to work 2,500 repair-hour in May but actually worked 2,400 repair-hours. The company expects its sales to be $48.00 per repair-hour. Required: Compute the company's activity variances for May. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Exercise 9-7 (Algo) Flexible Budgets and Activity Variances [LO9-1, LO9-2]
Jake's Roof Repair provided the following data concerning its costs:
Fixed Cost Cost per
per Month Repair-Hour
$ 20,900
Wages and salaries
Parts and supplies
Equipment depreciation
$ 15.00
ook
$ 7.20
$ 2,710
$ 0.60
Truck operating expenses
Rent
$ 5,740
$ 1.70
$ 4,650
$ 3,880 $ 0.60
nt
nt
nces
Administrative expenses
For example, wages and salaries should be $20,900 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 $48.00 per repair-hour.
Required:
Compute the company's activity variances for May.
Note: 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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1a6dff2a-a390-46e3-ad39-00533c1367d9%2F6d9885bc-7148-45b5-9059-d72b02301bd5%2Fynajqg6h_processed.png&w=3840&q=75)
Transcribed Image Text:2
Exercise 9-7 (Algo) Flexible Budgets and Activity Variances [LO9-1, LO9-2]
Jake's Roof Repair provided the following data concerning its costs:
Fixed Cost Cost per
per Month Repair-Hour
$ 20,900
Wages and salaries
Parts and supplies
Equipment depreciation
$ 15.00
ook
$ 7.20
$ 2,710
$ 0.60
Truck operating expenses
Rent
$ 5,740
$ 1.70
$ 4,650
$ 3,880 $ 0.60
nt
nt
nces
Administrative expenses
For example, wages and salaries should be $20,900 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 $48.00 per repair-hour.
Required:
Compute the company's activity variances for May.
Note: 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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