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: Actual guests Actual jeeps Revenue Expenses: Revenue Tour guide wages Vehicle expenses Administrative expenses 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: Cryan Jeep Tours Income Statement For the Month Ended May 31 Tour guide wages Vehicle expenses Administrative expenses Total expense Net operating income Guests Jeeps Revenue Expenses: Fixed element per month $0 $0 $ 5,600 $ 2,100 Tour guide wages Vehicle expenses Administrative expenses Total expense Net operating income 512 197 $ 87,854 33,157 20,640 7,888 61,685 $26,169 Required: Prepare a report showing the company's revenue and spending variances for May. 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.) Variable element per guest Cryan Jeep Tours Revenue and Spending Variances For the Month Ended May 31 Actual Results $ 217 $0 $ 15 $ 14 512 197 Variable element per jeep $0 $ 161 $70 $0 Flexible Budget 512 197 Revenue and Spending Variances
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: Actual guests Actual jeeps Revenue Expenses: Revenue Tour guide wages Vehicle expenses Administrative expenses 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: Cryan Jeep Tours Income Statement For the Month Ended May 31 Tour guide wages Vehicle expenses Administrative expenses Total expense Net operating income Guests Jeeps Revenue Expenses: Fixed element per month $0 $0 $ 5,600 $ 2,100 Tour guide wages Vehicle expenses Administrative expenses Total expense Net operating income 512 197 $ 87,854 33,157 20,640 7,888 61,685 $26,169 Required: Prepare a report showing the company's revenue and spending variances for May. 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.) Variable element per guest Cryan Jeep Tours Revenue and Spending Variances For the Month Ended May 31 Actual Results $ 217 $0 $ 15 $ 14 512 197 Variable element per jeep $0 $ 161 $70 $0 Flexible Budget 512 197 Revenue and Spending Variances
Managerial Accounting: The Cornerstone of Business Decision-Making
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Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
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Chapter9: Profit Planning And Flexible Budgets
Section: Chapter Questions
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
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A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Transcribed Image Text:TB Problem Qu. 9-401 (Algo) Cryan Jeep Tours operates jeep tours...
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:
Actual guests
Actual jeeps
Revenue
Expenses:
Revenue
Tour guide wages.
Vehicle expenses.
Administrative expenses
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:
Cryan Jeep Tours
Income Statement
For the Month Ended May 31
Tour guide wages
Vehicle expenses
Administrative expenses
Total expense
Net operating income
Guests
Jeeps
Revenue
Expenses:
Fixed element
per month
$0
$0
Tour guide wages
Vehicle expenses
Administrative expenses
Total expense
Net operating income
$ 5,600
$ 2,100
512
197
$ 87,854
Required:
Prepare a report showing the company's revenue and spending variances for May. 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.)
33, 157
20,640
7,888
61,685
$ 26,169
Variable
element per
guest
$ 217
$0
$15
$14
Cryan Jeep Tours
Revenue and Spending Variances
For the Month Ended May 31
Actual Results
512
197
Variable
element per
jeep
$0
$ 161
$70
$0
Flexible Budget
512
197
Revenue and
Spending Variances
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