Question

Otomo Jeep Tours operates jeep tours in the heart of the Colorado Rockies. The company bases its budgets on two measures of activity (le, 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 Revenue Tour guide wages Vehicle expenses Administrative expenses Variable Variable element element per guest per jeep $ 95 $ @ $ 109 $ 56 $ 0 $5,000 $2,000 In July, the company budgeted for 370 guests and 140 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 362 Actual jeeps 142 Revenue $34,330 Expenses : Tour guide wages 15,228 Vehicle expenses 14,52e Administrative expenses 2,362 Total expense 32,110 Net operating income $ 2,220 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.) Otomo Jeep Tours Activity Variances For the Month Ended July 31 Flexible Planning Activity Budget Budget Variances Guests 362 370 Jeeps 142140 Revenue Expenses: Tour guide wages Vehicle expenses Administrative expenses Total expense Net operating income

Answer 1

				Flexible	planned	Activity variance
				budget	budget
guests				362	370
jeeps				142	140
Revenue				34390	35150	760	U
expenses:
tour guide wages				15478	15260	218	U
Vechicle expenses				14400	14320	80	U
Administrative expenses				2362	2370	8	F
total expense				32240	31950	290	U
net income				2150	3200	1050	U