8-541
393. Hottle 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 $144 $0
Tour guide wages $0 $0 $163
Vehicle expenses $4,400 $5 $70
Administrative expenses $1,600 $2 $0
In February, the company budgeted for 342 guests and 146 jeeps. The company’s income
statement showing the actual results for the month appears below:
Hottle Jeep Tours
Income Statement
For the Month Ended February 28
Actual guests 367
Actual jeeps 149
Revenue $52,058
Expenses:
Tour guide wages 24,277
Vehicle expenses 16,555
Administrative expenses 2,374
Total expense 43,206
Net operating income $8,852
Required:
Prepare a report showing the company’s revenue and spending variances for February. Label
each variance as favorable (F) or unfavorable (U).
8-543
394. Cosme Tech is a for-profit vocational school. The school bases its budgets on two
measures of activity (i.e., cost drivers), namely student and course. The school uses the following
data in its budgeting:
Fixed element per month Variable element per student
Variable element per course
Revenue $0 $336 $0
Faculty wages $0 $0 $2,000
Course supplies $0 $52 $30
Administrative expenses $47,700 $13 $29
In April, the school budgeted for 1,870 students and 174 courses. The school’s income statement
showing the actual results for the month appears below:
Cosme Tech
Income Statement
For the Month Ended April 30
Actual students 1,670
Actual courses 172
Revenue $550,600
Expenses:
Faculty wages 350,110
Course supplies 93,040
Administrative expenses 75,728
Total expense 518,878
Net operating income $31,722
Required:
Prepare a showing the school’s revenue and spending variances for April. Label each variance as
favorable (F) or unfavorable (U).
8-545
395. Coody Clinic uses patient-visits as its measure of activity. The clinic has provided the
following report:
Coody Clinic
Comparison of Actual Results to Planning Budget
For the Month Ended July 31
Actual Results Planning Budget Variances
Patient-visits 2,000 2,300
Revenue ($36.40q) $76,110 $83,720 $7,610 U
Expenses:
Personnel expenses ($20,400 + $10.40q) 43,240 44,320 1,080 F
Medical supplies ($1,100 + $6.60q) 13,990 16,280 2,290 F
Occupancy expenses ($6,400 + $1.50q) 9,800 9,850 50 F
Administrative expenses ($2,400 + $0.40q) 3,080 3,320 240
F
Total expense 70,110 73,770 3,660 F
Net operating income $6,000 $9,950 $3,950 U
Required:
Prepare a report showing the clinic’s revenue and spending variances for July. Label each
variance as favorable (F) or unfavorable (U).
8-547
396. Amundson 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 $132 $0
Tour guide wages $0 $0 $158
Vehicle expenses $4,700 $13 $79
Administrative expenses $2,100 $2 $0
In September, the company budgeted for 456 guests and 155 jeeps. The company’s income
statement showing the actual results for the month appears below:
Amundson Jeep Tours
Income Statement
For the Month Ended September 30
Actual guests 481
Actual jeeps 153
Revenue $62,222
Expenses:
Tour guide wages 23,664
Vehicle expenses 22,530
Administrative expenses 3,122
Total expense 49,316
Net operating income $12,906
Required:
Prepare a report showing the company’s revenue and spending variances for September. Label
each variance as favorable (F) or unfavorable (U).
8-549
397. Poljak Tech is a for-profit vocational school. The school bases its budgets on two
measures of activity (i.e., cost drivers), namely student and course. The school uses the following
data in its budgeting:
Fixed element per month Variable element per student
Variable element per course
Revenue $0 $296 $0
Faculty wages $0 $0 $2,400
Course supplies $0 $50 $40
Administrative expenses $38,600 $14 $20
In February, the school budgeted for 1,970 students and 137 courses. The school’s income
statement showing the actual results for the month appears below:
Poljak Tech
Income Statement
For the Month Ended February 28
Actual students 2,370
Actual courses 142
Revenue $712,020
Expenses:
Faculty wages 336,260
Course supplies 124,010
Administrative expenses 73,660
Total expense 533,930
Net operating income $178,090
Required:
Prepare a report showing the school’s revenue and spending variances for February. Label each
variance as favorable (F) or unfavorable (U).
8-551
398. Blaney 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 $91 $0
Tour guide wages $0 $0 $178
Vehicle expenses $4,500 $9 $43
Administrative expenses $1,300 $2 $0
In October, the company budgeted for 456 guests and 115 jeeps. The actual activity for the
month was 446 guests and 111 jeeps.
Required:
Prepare the company’s flexible budget for the actual level of activity in October.
8-553
399. Tammo 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 $137 $0
Tour guide wages $0 $0 $147
Vehicle expenses $3,700 $14 $72
Administrative expenses $1,300 $2 $0
In June, the company budgeted for 430 guests and 172 jeeps. The actual activity for the month
was 440 guests and 171 jeeps.
Required:
Prepare the company’s planning budget for June.
8-555
400. Cruea Tech is a for-profit vocational school. The school bases its budgets on two
measures of activity (i.e., cost drivers), namely student and course. The school uses the following
data in its budgeting:
Fixed element per month Variable element per student
Variable element per course
Revenue $0 $408 $0
Faculty wages $0 $0 $2,400
Course supplies $0 $69 $46
Administrative expenses $33,100 $15 $33
In November, the school budgeted for 1,410 students and 138 courses. The actual activity for the
month was 1,810 students and 139 courses.
Required:
Prepare the school’s planning budget for November.
8-557
401. Sonner Tech is a for-profit vocational school. The school bases its budgets on two
measures of activity (i.e., cost drivers), namely student and course. The school uses the following
data in its budgeting:
Fixed element per month Variable element per
student Variable element per course
Revenue $0 $454 $0
Faculty wages $0 $0 $2,900
Course supplies $0 $77 $13
Administrative expenses $64,400 $17 $35
In September, the school budgeted for 1,760 students and 156 courses. The actual activity for
the month was 1,560 students and 153 courses.
Required:
Prepare the school’s flexible budget for the actual level of activity in September.
402. The standards for product K17 call for 5.0 meters of a raw material that costs $19.10 per
meter. Last month, 2,700 meters of the raw material were purchased for $51,435. The actual
output of the month was 460 units of product K17. A total of 2,500 meters of the raw material
were used to produce this output.
The direct materials purchases variance is computed when the materials are purchased.
Required:
a. What is the materials price variance for the month?
b. What is the materials quantity variance for the month?
8-560
403. The following standards have been established for a raw material used to make product
I92:
Standard quantity of the material per unit of output 4.5 pounds
Standard price of the material $13.90 per pound
The following data pertain to a recent month’s operations:
Actual material purchased 2,000 pounds
Actual cost of material purchased $26,200
Actual material used in production 1,300 pounds
Actual output 220 units of product I92
The direct materials purchases variance is computed when the materials are purchased.
Required:
a. What is the materials price variance for the month?
b. What is the materials quantity variance for the month?