Analyze a Performance Report
The Exterminator Inc. provides on-site residential pest extermination services. The company has several mobile teams who are dispatched from a central location in company-owned trucks. The company uses the number of jobs to measure activity. At the beginning of May, the company budgeted for 200 jobs, but the actual number of jobs turned out to be 208. A report comparing the budgeted revenues and costs to the actual revenues and costs appear below:
The Exterminator inc
Variance Report for the month ended May 31
|
Planning budget |
Actual Results |
Variances |
|
|
Jobs |
200 |
208 |
|
|
Revenue |
$3,700 |
$36,400 |
$600 U |
|
Expenses: |
|||
|
Mobile team operating costs |
16,900 |
17,060 |
160 U |
|
Exterminating supplies |
4,000 |
4,350 |
350 U |
|
Advertising |
900 |
1,040 |
140 U |
|
Dispatching costs |
2,700 |
2,340 |
360 U |
|
Office Rent |
2,300 |
2,300 |
0 |
|
Insurance |
3,600 |
3,600 |
0 |
|
Total Expense |
30,400 |
30,690 |
290 U |
|
Net Operating Income |
$6,600 |
$5,710 |
$890 U |
Required:
Is the above variance report useful for evaluating how well revenues and costs were controlled during May? Why or why not?