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
$3700
$36400
$600 U
Expenses:
Mobile team operating costs
16900
17060
160 U
Exterminating supplies
4000
4350
350 U
Advertising
900
1040
140 U
Dispatching costs
2700
2340
360 U
Office Rent
2300
2300
0
Insurance
3600
3600
0
Total Expense
30400
30690
290 U
Net Operating Income
$6600
$5710
$890 U
Required:
Is the above variance report useful for evaluating how well revenues and costs were controlled during May? Why or why not?