Turiano Corporation bases its budgets on machine-hours. The company's static planning budget for November appears below: Budgeted number of machine-hours 9500

Budgeted variable costs:

Supplies (@3.70 per machine-hour) $35,150

Power (@2.40 per machine-hour) $22,800

Budgeted fixed costs:

Salaries 46,550

Equipment depreciation 31,350

Total Cost $135,850

Required: Prepare a flexible budget for 10,400 machine-hours per month.

2.

Ruvolo 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 Variable element Variable element

per month per month per jeep

Revenue $0 $120 $0

Tour guide wages $0 $0 $167

Vehicle Expenses $4,600 $10 $41

Administrative expenses $1,300 $1 $0

In February, the company budgeted for 436 guests and 162 jeeps. The company's income statement showing the actual results for the month appears below:

Ruvolo Jeep Tours Income Statement For the month ended February 28

Actual guests 461

Actual jeeps 159

Revenue $54,020

Expenses:

Tour guide wages 25,913

Vehicle expenses 15,909

Administrative expenses 1,751

Total expense 43,573

Net operating income $10,447

Required:

Prepare a report showing the company's revenue and spending variances for February. Label each variance as favorable (F) or unfavorable (U).