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Otomo 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

Otomo 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:

Fixed element per month Variable element per guest Variable element per jeep
Revenue $ 0 $ 99 $ 0
Tour guide wages $ 0 $ 0 $ 107
Vehicle expenses $ 4,800 $ 9 $ 54
Administrative expenses $ 1,800 $ 1 $ 0

In July, the company budgeted for 368 guests and 138 jeeps. The company's income statement showing the actual results for the month appears below:

Otomo Jeep Tours
Income Statement
For the Month Ended July 31
Actual guests 358
Actual jeeps 140
Revenue $ 35,382
Expenses:
Tour guide wages 14,730
Vehicle expenses 15,702
Administrative expenses 2,158
Total expense 32,590
Net operating income $ 2,792

Required:

Prepare a report showing the company's activity variances for July. Label each variance as favorable (F) or unfavorable (U). (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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