Budgeting Project Q Search in Document Home Insert Design Layout References Mail

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Budgeting Project Q Search in Document Home Insert Design Layout References Mailings Review View Picture Format Share ^ Paste Styles Styles Pane Hottle Jeep Tours operates jeep tours in the eart of the Colorado Rockies. The company bases its budgets on two measures of activity (i.e., cost drivers), name guests and jeeps. One vehicle used in one tour on one day counts as a ep. Each jeep has one tour guide. The comhany uses the following data in its budgeting Variable element per Fixed element per month Variable element per jeep $0 guest $144 SO $5 $2 S0 SO $163 $70 $0 inistrative expenses $1 In February, the company budgeted for 342 guests and 146 jeeps. The company's income statement showing the actual results for the month appears below: Hottle Jeep Tours Income Statement For the Month Ended February 28 Actual guests Actual jeeps... 367 149 Revenue Expenses 24,277 16,555 Tour guide wages Vehicle expenses Total expense Net operating income Required Prepare a flexible budget performance report showing both the company's activity variances and revenue and spending variances for February. Label each variance as favorable (F) or unfavorable (U). Answer: Hottle Jeep Tours Flexible Budget Performance Report For the Month Ended February 28 Revenue and Actual Results Spending Flexible Variances Budget Activity Variances Planning Budget Guests Revenues Expenses Tour guide wages Vehicle expenses Administrative expenses Total expense Net operating income Page 3 of 3 612 Words English (US) Eg L] Focus 100% :--

Explanation / Answer

Flexible Budget Report Actual Revenue and spending variance [Actual-flexible] Flexible Activity variance [Planning-flexible] planning Guest 367 367 342 Jeeps 149 149 146 Revenue 52058 790 U 52848    [367*144] 3600 F 49248 [342*144] expense Tour guide wages 24277 10 F 24287    [149*163] 489 U 23798   [146*163] vehicle expense 16555 110 F 16665   [(5*367)+(70*149)+4400] 335 U 16330 [(5*342)+(70*146)+4400] administrative expense 2374 40 U 2334    [(2*367)+1600] 50 U 2284    [(2*342)+1600] Total expense 43206 86 F 43286 874 U 42412 Net operaing Income 8852 710 U 9562 2726 F 6836

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