Jake's Roof Repair has provided the following data concerning its costs: Fixed Cost per Month Wages and salaries $20,700 Parts and supplies Equipment $ 2,710 depreciation Truck operating $ 5,720 expenses Rent $ 4,640 Administrative $ 3,880 expenses Cost per Repair- Hour $15.00 $ 7.30 $ 0.40 $ 1.60 $ 0.50 For example, wages and salaries should be $20,700 plus $15.00 per repair-hour. The company expected to work 3,000 repair-hours in May, but actually worked 2,900 repair-hours. The company expects its sales to be $46.00 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.) Act Jake's Roof Repair Activity Variances For the Month Ended May 31 Revenue Expenses: Wages and salaries Parts and supplies Equipment depreciation Truck operating expenses Rent Administrative expenses Total expense Net operating income The Gourmand Cooking School runs short cooking courses at its small campus. Management has identified two cost drivers it uses in its budgeting and performance reports-the number of courses and the total number of students. For example, the school might run two courses in a month and have a total of 64 students enrolled in those two courses. Data concerning the company's cost formulas appear below: Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Fixed Cost Cost Cost per per per Month Course Student $2,930 $260 $1,240 $ 55 $4,600 $2,000 $3,600 $ 42 $ 6 For example, administrative expenses should be $3,600 per month plus $42 per course plus $6 per student. The company's sales should average $860 per student. The company planned to run four courses with a total of 64 students; however, it actually ran four courses with a total of only 58 students. The actual operating results for September appear below: Actual Revenue $52, 140 Instructor wages $11,000 Classroom supplies $16,490 Utilities $ 1,870 Campus rent $ 4,600 Insurance $ 2,140 Administrative $ 3,578 expenses Required: Prepare a flexible budget performance report that shows both revenue and spending variances and activity variances for September. (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.) Gourmand Cooking School Flexible Budget Performance Report For the Month Ended September 30 Actual Flexible Results Budget Planning Budget Courses Students 58 $ 52,140 Revenue Expenses: Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses Total expense Net operating income 11,000 16,490 1,8701 4,600 2,1401 3,578 39,6781 12,462 $
