ASAP!!!! 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: Fixed element per month Variable element per guest Variable element per jeep $0 $ 287 $0 Tour guide wages $0 $0 $ 154 Vehicle expenses $ 6,300 $22 $77 Administrative expenses $2,800 $ 21 $0 In May, the company budgeted for 532 guests and 237 jeeps. The company's income statement showing the actual results for the month appears below: Revenue Cryan Jeep Tours Income Statement For the Month Ended May 31 Actual guests Actual jeeps Revenue Expenses: Tour guide wages Vehicle expenses Administrative expenses Total expense 547 232 $ 122,854 38,757 24,140 11,388 74,285
ASAP!!!! 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: Fixed element per month Variable element per guest Variable element per jeep $0 $ 287 $0 Tour guide wages $0 $0 $ 154 Vehicle expenses $ 6,300 $22 $77 Administrative expenses $2,800 $ 21 $0 In May, the company budgeted for 532 guests and 237 jeeps. The company's income statement showing the actual results for the month appears below: Revenue Cryan Jeep Tours Income Statement For the Month Ended May 31 Actual guests Actual jeeps Revenue Expenses: Tour guide wages Vehicle expenses Administrative expenses Total expense 547 232 $ 122,854 38,757 24,140 11,388 74,285
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter3: Cost Behavior
Section: Chapter Questions
Problem 38P: Friendly Bank is attempting to determine the cost behavior of its small business lending operations....
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:NEED HELP ASAP!!!!
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:
Fixed element per month Variable element per guest Variable element per jeep
$0
$ 287
$0
Tour guide wages
$0
$0
$ 154
Vehicle expenses
$ 6,300
$ 22
$77
Administrative expenses $ 2,800
$ 21
$0
In May, the company budgeted for 532 guests and 237 jeeps. The company's income statement showing the actual results
for the month appears below:
Revenue
Cryan Jeep Tours
Income Statement
For the Month Ended May 31
Actual guests
Actual jeeps
Revenue
Expenses:
Tour guide wages
Vehicle expenses
Administrative expenses
Total expense
Net operating income
547
232
$ 122,854
38,757
24,140
11,388
74,285
$ 48,569
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.)
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