Asked by Jessica Garrett on Jul 05, 2024
Verified
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 447 guests and 152 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).
Revenue Variances
Differences between actual revenues and expected revenues.
Cost Drivers
Elements that cause a change in the cost of an activity, affecting the overall expense of producing a product or delivering a service.
Jeep Tours
An off-road adventure experience provided by tour operators where participants explore rough terrains using jeeps.
- Analyze budget variances, identifying favorable and unfavorable variances.
Verified Answer
DM
Learning Objectives
- Analyze budget variances, identifying favorable and unfavorable variances.
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