Asked by Mohd Ashraff Izad Sulaiman on May 01, 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 348 guests and 143 jeeps. The actual activity for the month was 373 guests and 139 jeeps.Required:Prepare a report showing the company's activity variances for November. Label each variance as favorable (F) or unfavorable (U).
Colorado Rockies
A professional baseball team based in Denver, Colorado, part of Major League Baseball's National League West division.
Cost Drivers
Factors or activities that directly cause a change in the cost of a product or service.
Activity Variances
The difference between the budgeted and actual amount of an activity, often relating to the cost or usage variance in production activities.
- Measure the divergences in activity levels and ascertain if they are favorable or unfavorable.
- Analyze the financial performance of a company through its activity variances.
Verified Answer
ZK
Learning Objectives
- Measure the divergences in activity levels and ascertain if they are favorable or unfavorable.
- Analyze the financial performance of a company through its activity variances.