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: Guests Jeeps Revenue Expenses: Fixed element per month Revenue $0 Tour guide wages Vehicle expenses $ 6,000 Administrative expenses $ 3,100 In November, the company budgeted for 370 guests and 165 Jeeps. The actual activity for the month was 384 guests and 150 Jeeps. Tour guide wages Vehicle expenses Administrative expenses Total expense Net operating income Variable element per guest $183 Required: Prepare a report showing the company's activity variances for November. Label each varlance as favorable (F) or unfavorable (U). (Indicate the effect of each varlance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (l.e., zero varlance). Input all amounts as positive values.) Flexible Budget $0 $ 22 $ 12 Bruer Jeep Tours Activity Variances For the Month Ended November 30 384 150 Variable element per jeep $ 178 $ 55 $0 Activity Variances Planning Budget 370 165

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: Guests Jeeps Revenue Expenses: Fixed element per month Revenue $0 Tour guide wages Vehicle expenses $ 6,000 Administrative expenses $ 3,100 In November, the company budgeted for 370 guests and 165 Jeeps. The actual activity for the month was 384 guests and 150 Jeeps. Tour guide wages Vehicle expenses Administrative expenses Total expense Net operating income Variable element per guest $183 Required: Prepare a report showing the company's activity variances for November. Label each varlance as favorable (F) or unfavorable (U). (Indicate the effect of each varlance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (l.e., zero varlance). Input all amounts as positive values.) Flexible Budget $0 $ 22 $ 12 Bruer Jeep Tours Activity Variances For the Month Ended November 30 384 150 Variable element per jeep $ 178 $ 55 $0 Activity Variances Planning Budget 370 165

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter12: Activity-based Management

Section: Chapter Questions

Problem 25P: Novo, Inc., wants to develop an activity flexible budget for the activity of moving materials. Novo...

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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: Revenue Tour guide wages Vehicle expenses Administrative expenses Fixed element Variable element per Variable element per per month guest jeep $ 0 $ 179 $ 0 $ 0 $ 0 $ 180 $ 5,800 $ 2,900 $ 19 $ 10 $ 57 $ 0 In November, the company budgeted for 366 guests and 161 jeeps. The actual activity for the month was 382 guests and 148 jeeps. Required: Prepare a report showing the company's activity variances for November. Label each variance as favorable (F) or unfavorable (U). Note: 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. Guests Jeeps Revenue…
Mcinerney 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 elementper month Variable elementper guest Variable element per jeep Revenue $ 0 $ 161 $ 0 Tour guide wages $ 0 $ 0 $ 132 Vehicle expenses $ 4,600 $ 22 $ 75 Administrative expenses $ 3,300 $ 15 $ 0 In October, the company budgeted for 339 guests and 105 jeeps. The actual activity for the month was 410 guests and 152 jeeps. Required: Prepare the company's flexible budget for the actual level of activity in October.
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…
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:…
Ozark Bird Hunters (OBH) conducts birding tours in the local area. The company owners create a management budget using two measures of activities (also referred to as cost drivers): Customers and Jeeps. Each tour conducted includes one field guide with one jeep. OBH uses the following data to create the budget: Fixed cost Variable cost per Variable cost per per month Customer Jeep Revenue $ 650 Field Guide fee $ 275 Jeep expenses $ 3,500 Administrative expenses $ 1,500 In April, the company budgeted for 500 customers and 100 jeeps. The actual activity for the month was 524 customers and 110 jeeps. Create a report showing the activity variances for April. The FORMAT of your report should look EXACTLY like the report in your textbook in Exhibit 9-6 on page 411. Label each variance as favorable (F) or Unfavorable (U). If rounding is required, round to the nearest whole dollar (for example, $10.666666667 would be $11)
Foy Company has a welding activity and wants to develop a flexible budget formula for the activity. The following resources are used by the activity: Four welding units, with a lease cost of 12,000 per year per unit Six welding employees each paid a salary of 50,000 per year (A total of 9,000 welding hours are supplied by the six workers.) Welding supplies: 300 per job Welding hours: Three hours used per job During the year, the activity operated at 90 percent of capacity and incurred the actual activity and resource costs, shown on page 676. Lease cost: 48,000 Salaries: 315,000 Parts and supplies: 805,000 Required: 1. Prepare a flexible budget formula for the welding activity using welding hours as the driver. 2. Prepare a performance report for the welding activity. 3. What if welders were hired through outsourcing and paid 30 per hour (the welding equipment is provided by Foy)? Repeat Requirement 1 for the outsourcing case.
Novo, Inc., wants to develop an activity flexible budget for the activity of moving materials. Novo uses eight forklifts to move materials from receiving to stores. The forklifts are also used to move materials from stores to the production area. The forklifts are obtained through an operating lease that costs 18,000 per year per forklift. Novo employs 25 forklift operators who receive an average salary of 50,000 per year, including benefits. Each move requires the use of a crate. The crates are used to store the parts and are emptied only when used in production. Crates are disposed of after one cycle (two moves), where a cycle is defined as a move from receiving to stores to production. Each crate costs 1.80. Fuel for a forklift costs 3.60 per gallon. A gallon of gas is used every 20 moves. Forklifts can make three moves per hour and are available for 280 days per year, 24 hours per day (the remaining time is downtime for various reasons). Each operator works 40 hours per week and 50 weeks per year. Required: 1. Prepare a flexible budget for the activity of moving materials, using the number of cycles as the activity driver. 2. Calculate the activity capacity for moving materials. Suppose Novo works at 80 percent of activity capacity and incurs the following costs: Prepare the budget for the 80 percent level and then prepare a performance report for the moving materials activity. 3. Calculate and interpret the volume variance for moving materials. 4. Suppose that a redesign of the plant layout reduces the demand for moving materials to one-third of the original capacity. What would be the budget formula for this new activity level? What is the budgeted cost for this new activity level? Has activity performance improved? How does this activity performance evaluation differ from that described in Requirement 2? Explain.
Analyze Adventure Park's staffing budget Adventure Park is a large theme park. Staffing for the theme park involves many different labor classifications, one of which is the parking lot staff. The parking lot staff collects parking fees, provides directions, and operates trams. The staff size is a function of the number of daily vehicles. Adventure Park has determined from historical experience that a staff member is needed for every 200 vehicles. Adventure Park estimates staff for both school days and nonschool days. Nonschool days are higher attendance days than school days. The number of expected vehicles for each day is as follows: School Days Nonschool Days Number of vehicles per day 3,000 8,000 Number of days per year 165 200 Parking fees are $10 per vehicle. Each parking lot employee is paid $110 per day. a. Determine the annual parking lot staff budget for school days, nonschool days, and total. School Days Nonschool Days Total Total parking lot staff expense $ b. Determine the…
Gig Harbor Boating is the wholesale distributor of a small recreational catamaran sailboat. Management has prepared the following summary data to use in its annual budgeting process: Budgeted unit sales Selling price per unit Cost per unit Variable selling and administrative expense (per unit) Fixed selling and administrative expense (per year) Interest expense for the year Required: Prepare the company's budgeted income statement for the year. Gig Harbor Boating Budgeted Income Statement 600 $ 2,020 $ 1,670 $ 55 $ 107,000 $ 18,000
Analyze Adventure Park’s staffing budget Adventure Park is a large theme park. Staffing for the theme park involves many different labor classifications, one of which is the parking lot staff. The parking lot staff collects parking fees, provides directions, and operates trams. The staff size is a function of the number of daily vehicles. Adventure Park has determined from historical experience that a staff member is needed for every 200 vehicles. Adventure Park estimates staff for both school days and nonschool days. Nonschool days are higher attendance days than school days. The number of expected vehicles for each day is as follows:
Compute the Margin of Safety Molander Corporation is a distributor of a sun umbrella used at resort hotels. Data concerning the next month’s budget appear below: Required: 1. What is the company’s margin of safety? 2. What is the company’s margin of safety as a percentage of its sales?
Molander Corporation is a distributor of a sun umbrella used at resort hotels. Data concerning the next month's budget appear below: Selling price per unit Variable expense per unit Fixed expense per month Unit sales per month 1. Margin of safety (in dollars) 2. Margin of safety percentage $28 $14 $ 12,040 1,010 Required: 1. What is the company's margin of safety? (Do not round intermediate calculations.) 2. What is the company's margin of safety as a percentage of its sales? (Round your percentage answer to 2 decimal places (i.e. .1234 should be entered as 12.34).) %