Answer and Explanation:
The preparation of the report showing the company revenue and spending variance is shown below:
Cryan Jeep Tours
Revenue and Spending Variances
For the Month Ended May 31
Particulars Actual Results Flexible Budget Revenue & Spending Variances
Guests 507 507
Jeeps 192 192
Revenue $82,854 $104,949 $22,095 U (A)
(507 ×$207)
Expenses:
Tour guide wages $32,357 $31,104 $1,253 U
(192 × $162)
Vehicle expenses $20,140 $25,846 $5,706 F
($5,500 + 507 × $14 + 192 × $69)
Administrative expenses $7,388 $8,591 $1,203 F
($2,000 + 507 × $13 )
Total expense $59,885 $65,541 $5,656 F (B)
Net operating income $22,969 $39,408 $16,439 U (A - B)
We simply deduct all expenses from the revenues so that the net operating income could come
