Question

Otomo 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 July, the company budgeted for 364 guests and 134 jeeps. The company's income statement showing the actual results for the month appears below:

Otomo Jeep Tours | ||

Income Statement | ||

For the Month Ended July 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
July. Label each variance as favorable (F) or unfavorable (U).
**(Indicate the effect of each variance by selecting "F" for
favorable, "U" for unfavorable, and "None" for no effect (i.e.,
zero variance). Input all amounts as positive values.)**

Answer #1

Hottle 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...

cinerney 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
$
101
$
0
Tour guide wages...

Mcinerney 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
$
96
$
0
Tour guide wages...

Roberds Tech is a for-profit vocational school. The school bases
its budgets on two measures of activity (i.e., cost drivers),
namely student and course. The school uses the following data in
its budgeting:
Fixed element
per month
Variable element per student
Variable element per course
Revenue
$
0
$
268
$
0
Faculty wages
$
0
$
0
$
3,040
Course supplies
$
0
$
46
$
34
Administrative expenses
$
26,200
$
21
$
46
In March, the school...

Roberds Tech is a for-profit vocational school. The school bases
its budgets on two measures of activity (i.e., cost drivers),
namely student and course. The school uses the following data in
its budgeting:
Fixed element
per month
Variable element per
student
Variable element per
course
Revenue
$
0
$
238
$
0
Faculty wages
$
0
$
0
$
2,980
Course supplies
$
0
$
40
$
28
Administrative expenses
$
25,900
$
15
$
40
In March, the school...

Roberds Tech is a for-profit vocational school. The school bases
its budgets on two measures of activity (i.e., cost drivers),
namely student and course. The school uses the following data in
its budgeting: Fixed element per month Variable element per student
Variable element per course Revenue $ 0 $ 268 $ 0 Faculty wages $ 0
$ 0 $ 3,040 Course supplies $ 0 $ 46 $ 34 Administrative expenses $
26,200 $ 21 $ 46 In March, the school...

Liscomb Tech is a for-profit vocational school. The school bases
its budgets on two measures of activity (i.e., cost drivers),
namely student and course. The school uses the following data in
its budgeting:
Fixed element per month
Variable element per student
Variable element per course
Revenue
$0
$297
$0
Faculty wages
$0
$0
$2,300
Course supplies
$0
$39
$45
Administrative expenses
$31,600
$12
$33
In October, the school budgeted for 1,520 students and 113 courses.
The school's income statement showing...

Dundy Cooking School bases its budgets on two measures of
activity (i.e., cost drivers), namely student and course. The
school uses the following data in its budgeting:
Fixed Element
per month
Variable element
per student
Variable Element
per course
revenue
$0
$354
$0
faculty wages
$0
$0
$2,300
course supplies
$0
$48
$40
Administrative Expenses
$41,700
$13
$21
In October, the school budgeted for 1,400 students and 127
courses. The actual activity for the month was 1,500 students and
129...

Lavage Rapide is a
Canadian company that owns and operates a large automatic car wash
facility near Montreal. The following table provides data
concerning the company’s costs:
Fixed Cost
per Month
Cost per
Car Washed
Cleaning
supplies
$
0.50
Electricity
$
1,400
$
0.09
Maintenance
$
0.20
Wages and
salaries
$
4,700
$
0.40
Depreciation
$
8,000
Rent
$
1,800
Administrative
expenses
$
1,600
$
0.04
For example,
electricity costs are $1,400 per month plus $0.09 per car washed.
The...

Alyeski Tours operates day tours of coastal glaciers in Alaska
on its tour boat the Blue Glacier. Management has identified two
cost drivers—the number of cruises and the number of
passengers—that it uses in its budgeting and performance reports.
The company publishes a schedule of day cruises that it may
supplement with special sailings if there is sufficient demand. Up
to 85 passengers can be accommodated on the tour boat. Data
concerning the company’s cost formulas appear below:
Fixed Cost...

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