Asked by Claudia Piercy on Jul 25, 2024
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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:
In May, the company budgeted for 497 guests and 202 jeeps. The company's income statement showing the actual results for the month appears below:
Required:
Prepare a report showing the company's revenue and spending variances for May. Label each variance as favorable (F) or unfavorable (U).
Jeep Tours
Customized tours offered to tourists that utilize jeeps to navigate terrain that is typically not accessible by standard vehicles, often in natural or adventure settings.
Revenue Variances
The difference between actual revenue and expected revenue over a specific period, often analyzed to understand performance.
Spending Variances
Differences between the actual amount spent on something and its budgeted (or planned) amount, often analyzed for cost control purposes.
- Master the ability to analyze and interpret budgetary variances, distinguishing between positive and negative impacts.
- Develop the ability to handle and allocate funds for numerous operational activities in services.
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Learning Objectives
- Master the ability to analyze and interpret budgetary variances, distinguishing between positive and negative impacts.
- Develop the ability to handle and allocate funds for numerous operational activities in services.
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