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Problem - 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:
Fixed element per month
Variable element per guest
Variable element per jeep
Revenue
$0
$173
Tour guide wages
$183
Vehicle expenses
$5,500
$16
$60
Administrative expenses
$2,600
$7
In November, the company budgeted for 360 guests and 155 jeeps. The actual activity for the month was 379 guests and 145 jeeps.
Required - Prepare a report showing the company's activity variances for November. Label each variance as favorable (F) or unfavorable (U).
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