Question
Pink Tours operates jeep tours in the heart of Death Valley. The company bases its budgets on two measures of activity (i.e., cost drivers), namely
Pink Tours operates jeep tours in the heart of Death Valley. 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 |
| $ | 166 |
| $ | 0 |
|
| Tour guide wages | $ | 0 |
| $ | 0 |
| $ | 133 |
|
| Vehicle expenses | $ | 4,650 |
| $ | 23 |
| $ | 76 |
|
| Administrative expenses | $ | 3,350 |
| $ | 16 |
| $ | 0 |
|
In March, the company budgeted for 340 guests and 106 jeeps. The actual activity for the month was 415 guests and 156 jeeps.
Required:
Prepare the company's flexible budget for the actual level of activity in March.
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Cost Accounting A Managerial Emphasis
Authors: Charles T. Horngren, Foster George, Srikand M. Datar, Maureen P. Gowing
5th Canadian Edition
0135004934, 978-0135004937
