Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Velazques 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

Velazques 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 $ 92 $ 0
Tour guide wages $ 0 $ 0 $ 101
Vehicle expenses $ 4,000 $ 9 $ 53
Administrative expenses $ 1,000 $ 1 $ 0


In March, the company budgeted for 356 guests and 129 jeeps. The company's income statement showing the actual results for the month appears below:


Velazques Jeep Tours
Income Statement
For the Month Ended March 31
Actual guests 346
Actual jeeps 131
Revenue $ 31,772


Expenses:
Tour guide wages 12,981
Vehicle expenses 14,177
Administrative expenses 1,346


Total expense 28,504


Net operating income $ 3,268






Required:

Prepare a report showing the company's activity variances for March. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)


Velazques Jeep Tours
Activity Variances
For the Month Ended March 31
Revenue $

Expenses:
Tour guide wages
Vehicle expenses
Administrative expenses

Total expense

Net operating income $


Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Human Resource Function Audit

Authors: Peter Reilly, Marie Strebler, Polly Kettley

1st Edition

0955970776, 978-0955970771

More Books

Students also viewed these Accounting questions

Question

understand the key issues concerning international assignments

Answered: 1 week ago