The National Park Service prepared the following budget for one of its national parks for 20X1:
Revenue from fees ....... $5,000,000
Variable costs (miscellaneous) ... 500,000
Contribution margin ....... $4,500,000
Fixed costs (miscellaneous) ... 4,500,000
Income ............ $ 0

The fees were based on an average of 25,000 vehicle-admission days (vehicles multiplied by number of days in parks) per week for the 20-week season, multiplied by average entry and other fees of $10 per vehicle-admission day.
The season was booming for the first 4 weeks. During the fifth week, however, there were major forest fires. A large percentage of the park was scarred by the fires. As a result, the number of visitors to the park dropped sharply during the remainder of the season.
Total revenues fell $1.2 million short of the original budget. Variable costs fell as expected, and fixed costs were unaffected except for hiring extra firefighters at a cost of $300,000.
Prepare a columnar summary of performance, showing the original (static) budget, sales-activity variances, flexible budget, flexible-budget variances, and actual results.

  • CreatedNovember 19, 2014
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