Question

Cryan 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: Variable Fixed element Variable element element per jeep per guest 127 per month Revenue Tour guide wages Vehicle expenses Administrative expenses $ 170 $ 4,700 $ 1,200 6 61 n May, the company budgeted for 452 guests and 157 jeeps. The company's income statement showing the actual results for the month appears below: Cryan Jeep Tours Income Statement For the Month Ended May 31 Actual guests Actual jeeps 467 152 $56,854 Revenue Expenses: Tour guide wages Vehicle expenses Administrative expenses Total expense 25,957 16,140 3,388 45,485 $11,369 Net operating income

Answer 1

Calculate following

	Actual results	Flexible budget	Revenue and spending variance
Guests	467	467
Jeeps	152	152
Revenue	56854	59309	2455 U
Expenses
Tour guide wages	25957	25840	117 U
Vehicle expenses	16140	16774	634 F
Administrative expenses	3388	3535	147 F
Total expense	45485	46149	664 F
Net operating income	11369	13160	1791 U