Asked by Angel Martinez on Jul 28, 2024
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Bruer 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 November, the company budgeted for 386 guests and 181 jeeps. The actual activity for the month was 392 guests and 158 jeeps.
Required:
Prepare a report showing the company's activity variances for November. Label each variance as favorable (F) or unfavorable (U).
Activity Variances
The differences between budgeted and actual costs in an activity-based costing system, indicating areas of over or underperformance.
Jeep Tours
A type of adventurous tour or excursion that involves exploring locations using a jeep.
Guests
Individuals who are invited or visit a place where they do not live or work.
- Decipher the approach to formulating a responsive budget in accordance with authentic activity records.
- Refine the ability to assess and understand differences from the planned budget, identifying both positive and negative discrepancies.
- Learn how to manage and budget for multiple measures of activity in service operations.
Verified Answer
Learning Objectives
- Decipher the approach to formulating a responsive budget in accordance with authentic activity records.
- Refine the ability to assess and understand differences from the planned budget, identifying both positive and negative discrepancies.
- Learn how to manage and budget for multiple measures of activity in service operations.
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