Capes Corporation is a wholesaler of industrial goods. Data regarding the store's operations follow:

• Sales are budgeted at $460,000 for November, $470,000 for December, and $450,000 for January.
• Collections are expected to be 55% in the month of sale and 45% in the month following the sale.
• The cost of goods sold is 60% of sales.
• The company desires an ending merchandise inventory equal to 35% of the cost of goods sold in the following month. Payment for merchandise is made in the month following the purchase.
• The November beginning balance in the accounts receivable account is $81,000.
• The November beginning balance in the accounts payable account is $268,000.

Required:

a. Prepare a Schedule of Expected Cash Collections for November and December. (2 marks)

b. Prepare a Merchandise Purchases Budget for November and December. (3 marks)

Part B (5 marks)

Bo Jeep Tours operates jeep tours in the heart of the Colorado Rockies. The company bases its budgets on two measures of activity (i.e., cost drivers), namely guests and jeeps. One vehicle used in one tour on one day counts as a jeep. Each jeep has one tour guide. The company uses the following data in its budgeting:

In November, the company budgeted for 354 guests and 149 jeeps. The actual activity for the month was 376 guests and 142 jeeps.

Required:

Prepare a report showing the company's static budget variance for November.