Velazques Jeep Tours operates jeep tours in the heart of the Colorado Rockies. T

Question

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 $ 98 $ 0 Tour guide wages $ 0 $ 0 $ 103 Vehicle expenses $ 4,400 $ 5 $ 50 Administrative expenses $ 1,400 $ 1 $ 0 In March, the company budgeted for 364 guests and 134 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 358 Actual jeeps 136 Revenue $ 35,024 Expenses: Tour guide wages 13,758 Vehicle expenses 13,110 Administrative expenses 1,758 Total expense 28,626 Net operating income $ 6,398 Required: Prepare a report showing the company's activity variances for March. Label each variance as favorable (F) or unfavorable (U). (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 $ (Click to select)UFNone Expenses: Tour guide wages (Click to select)FNoneU Vehicle expenses (Click to select)UNoneF Administrative expenses (Click to select)NoneUF Total expense (Click to select)FUNone Net operating income $ (Click to select)NoneUF

Explanation / Answer

358 guests, 136 jeeps 364 guests, 134 jeeps Particulars Actuals Budget Variance F/UF Variable element Revenue 35024 35672 -648 Favourable Guests 35672 Jeeps 0 Tour guide wages 13758 13802 -44 Favourable Guests 0 Jeeps 13802 Vehicle Expense 13110 12920 190 Unfavourable Guests 1820 Jeeps 6700 Administrative Expenses 1758 1764 -6 Favourable Guests 364 Jeeps 0 Net operating income 6398 7186 -788 Unfavourable

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