Question $2(25$ marks$)$

ABC Bus Lines runs a series of bus routes. A new route is being planned for next year.

The Sales Manager says the range of passengers would be:

$\backslash$table$[[20,000,$Conservative Estimate$],[40,000,$Optimistic Estimate$],[$$$26\mathrm{.}00,$Ticket Price$]]$

The controller provides the following information:

$\backslash$table$[[$$$6\mathrm{.}00,$Fuel$],[$$$6\mathrm{.}00,$Driver$],[$$$2\mathrm{.}00,$Selling$],[$$$1\mathrm{.}00,$Admin$],[$$$15\mathrm{.}00,],[$$$100,000,$Facility Overhead $($Regardless of Number of Trips$)],[$$$50,000,$Selling & Administration $($Regardless of Number of Trips$)]]$Instructions

Assume the first$-$year results were:

$22,450-$Passengers

$$538,800-$Revenue

$$123,475-$Fuel

$$95,415-$Driver

$$41,500-$Selling Variable

$$17,250-$Administration Variable

$$125,000-$Facility Costs

$$80,000-$Selling & Administration

A$.$ Prepare flexible budgets based on $20,000,30,000,$ and $40,000$ passengers.

B$.$ Determine the break$-$even point for each budget.

C$.$ Prepare a flexible budget report including variances based on the actual results of $22,450$ passengers.

D$.$ Discuss the results of the year and decide what action should be taken in the future as a result.