Alyeski Tours operates day tours of coastal glaciers in Alaska on its tour boat the Blue Glacier. Management has identified two cost drivers-the number of cruises and the number of passengers-that it uses in its budgeting and performance reports. The company publishes a schedule of day cruises that it may supplement with special sailings if there is sufficient demand. Up to 82 passengers can be accommodated on the tour boat. Data concerning the company's cost formulas appear below: Vessel operating costs Advertising Administrative costs Insurance Fixed Cost Cost per per Month Cruise $ 6,200 $ 476.00 $31.00 For example, vessel operating costs should be $6,200 per month plus $476.00 per cruise plus $3.40 per passenger. The company's sales should average $33.00 per passenger. In July, the company provided 56 cruises for a total of 3,100 passengers. Required: Prepare the company's flexible budget for July. Revenue Expenses: $ 2,000 $ 5,700 $ 3,300 Alyeski Tours Flexible Budget For the Month Ended July 31 Vessel operating costs Advertising Administrative costs Insurance Total expense Net operating income Cost per Passenger $ 3.40 $ 1.50

Alyeski Tours operates day tours of coastal glaciers in Alaska on its tour boat the Blue Glacier. Management has identified two cost drivers-the number of cruises and the number of passengers-that it uses in its budgeting and performance reports. The company publishes a schedule of day cruises that it may supplement with special sailings if there is sufficient demand. Up to 82 passengers can be accommodated on the tour boat. Data concerning the company's cost formulas appear below: Vessel operating costs Advertising Administrative costs Insurance Fixed Cost Cost per per Month Cruise $ 6,200 $ 476.00 $31.00 For example, vessel operating costs should be $6,200 per month plus $476.00 per cruise plus $3.40 per passenger. The company's sales should average $33.00 per passenger. In July, the company provided 56 cruises for a total of 3,100 passengers. Required: Prepare the company's flexible budget for July. Revenue Expenses: $ 2,000 $ 5,700 $ 3,300 Alyeski Tours Flexible Budget For the Month Ended July 31 Vessel operating costs Advertising Administrative costs Insurance Total expense Net operating income Cost per Passenger $ 3.40 $ 1.50

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Alyeski Tours operates day tours of coastal glaciers in Alaska on its tour boat the Blue Glacier. Management has identified two cost drivers-the number of cruises and the number of passengers-that it uses in its budgeting and performance reports. The company publishes a schedule of day cruises that It may supplement with special sailings if there is sufficient demand. Up to 87 passengers can be accommodated on the tour boat. Data concerning the company's cost formulas appear below: Vessel operating costs Advertising Administrative costs Insurance For example, vessel operating costs should be $6,200 per month plus $473.00 per cruise plus $3.20 per passenger. The company's sales should average $29.00 per passenger. In July, the company provided 59 cruises for a total of 3,150 passengers. Required: Prepare the company's flexible budget for July. Alyeski Tours Flexible Budget For the Month Ended July 31 Revenue Expenses: Fixed Cost Cost per per Month Cruise $ 473.00 Vessel operating costs…
Thermal Rising, Incorporated, makes paragliders for sale through specialty sporting goods stores. The company has a standard paraglider model, but also makes custom-designed paragliders. Management has designed an activity-based costing system with the following activity cost pools and activity rates: Activity Cost Pool Supporting direct labor Order processing Custom design processing Customer service Number of gliders Number of orders Activity Rate $16 per direct labor-hour Management would like an analysis of the profitability of a particular customer, Big Sky Outfitters, which has ordered the following products over the last 12 months: $ 198 per order. $260 per custom design $ 422 per customer Number of custom designs Direct labor-hours per glider Selling price per glider Direct materials cost per glider. The company's direct labor rate is $18 per hour. Customer margin Standard Model 16 1 0 27.50 $ 1,925 $452 Custom Design 2 2 2 32.00 $ 2,490 $582 Required: Using the company's…
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Albedo Incorporated manufactures high-end replacement telescope lenses for amateur and professional astronomers who are seeking to upgrade the performance of their telescopes. You have just become employed as a staff accountant at Albedo, and Jordan Coleman, the controller, has asked you to help with maintenance cost estimation for the lens manufacturing process. You review the manufacturing process and decide that the best cost driver for maintenance costs is machine hours. The data below are from the previous fiscal year for maintenance costs and machine hours: Month Maintenance Costs Machine Hours $ 3,210 4,650 5,175 3,350 3,100 1 2 3 4 5 6 7 8 9 10 11 12 2,950 2,900 2,900 4,120 4,350 3,500 3,775 2,750 3,900 4,050 2,690 2,500 2,580 2,300 2,500 3,160 3,325 2,780 3,000 Required: 1. What is the cost equation for maintenance costs using the high-low method? (Round "slope (unit variable cost)" to 2 decimal places. Negative amounts should be indicated by a minus sign.)
Muncey Fishing Charters consists of one boat with a capacity of 15 passengers, not including the crew. Muncey offers only one charter package: a one-half day fishing trip off the coast. Because of weather, crew availability, and so on, Muncey operates an average of 20 days a month and only makes one trip on the day It operates. Price and cost Information for the Muncey follows: Selling price per passenger-trip Variable cost per passenger-trip Fixed cost per month Income tax rate $ 425 $ 175 $ 75,000 24% A passenger-trip is considered to be one passenger per trip. Required: a. Compute Muncey's break-even point in number of passenger-trips per month. b. How many passenger-trips per month must Muncey sell to earn $10,450 after taxes?
Alyeski Tours operates day tours of coastal glaciers in Alaska on its tour boat the Blue Glacier. Management has identified two cost drivers—the number of cruises and the number of passengers—that it uses in its budgeting and performance reports. The company publishes a schedule of day cruises that it may supplement with special sailings if there is sufficient demand. Up to 88 passengers can be accommodated on the tour boat. Data concerning the company’s cost formulas appear below: Fixed Cost per Month Cost per Cruise Cost per Passenger Vessel operating costs $ 6,400 $ 478.00 $ 3.20 Advertising $ 2,600 Administrative costs $ 5,000 $ 32.00 $ 1.50 Insurance $ 3,300 For example, vessel operating costs should be $6,400 per month plus $478.00 per cruise plus $3.20 per passenger. The company’s sales should average $35.00 per passenger. In July, the company provided 51 cruises for a total of 3,000 passengers. Required: Prepare the company’s flexible budget for…
Yardwork Tools Corp manufactures garden tools in a factory in Taneytown, Maryland. Recently, the company designed a collection of tools for professional use rather than consumer use. Management needs to make a good decision about whether to produce this line in their existing space in Maryland, where space is available or to accept an offer from a manufacturer in Taiwan. Data concerning the decision are as follows: Expected annual sales of tools (in units) 660,000 Average selling price of tools $11 Price quoted by Taiwanese company, in New Taiwanese Dollars (NTD) 27,300 Current exchange rate 9,100 NTD = $1 Variable manufacturing costs $2.85 per unit Incremental annual fixed manufacturing costs associated with the new product line $310,000 Variable selling and distribution costsª $0.50 per unit Annual fixed selling and distribution costsª $250,000 ªSelling and distribution costs are the same regardless of whether the tools…
Rooney Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing 9,100 containers follows. Unit-level materials Unit-level labor Unit-level overhead Product-level costs* $ 5,200 6,500 3,600 9,300 26,600 Allocated facility-level costs *One-third of these costs can be avoided by purchasing the containers. Russo Container Company has offered to sell comparable containers to Rooney for $2.70 each. Required a. Calculate the total relevant cost. Should Rooney continue to make the containers? b. Rooney could lease the space it currently uses in the manufacturing process. If leasing would produce $11,500 per month, calculate the total avoidable costs. Should Rooney continue to make the containers? a. Total relevant cost Should Rooney continue to make the containers? b. Total avoidable cost Should Rooney continue to make the containers?
5 Alyeski Tours operates day tours of coastal glaciers in Alaska on its tour boat the Blue Glacier. Management has identified two cost drivers-the number of cruises and the number of passengers-that it uses in its budgeting and performance reports. The company publishes a schedule of day cruises that it may supplement with special sailings if there is sufficient demand. Up to 85 passengers can be accommodated on the tour boat. Data concerning the company's cost formulas appear below: ts- Book Hint Vessel operating costs Advertising Administrative costs Insurance Fixed Cost per cost per cost per Month Cruise Passenger $ 3.20 $ 6,300 $ 473.00 $ 2,700 $ 33.00 $ 5,600 $ 3,600 For example, vessel operating costs should be $6,300 per month plus $473.00 per cruite plus $3.20 per passengec The company's sales should average $33,00 per passenger. In July, the company provided 52 cruises for a total of 3.150 passengers. Required: Prepare the company's flexible budget for July Alyeski Tours…
Alyeski Tours operates day tours of coastal glaciers in Alaska on its tour boat the Blue Glacier. Management has identified two cost drivers—the number of cruises and the number of passengers—that it uses in its budgeting and performance reports. The company publishes a schedule of day cruises that it may supplement with special sailings if there is sufficient demand. Up to 86 passengers can be accommodated on the tour boat. Data concerning the company’s cost formulas appear below: Fixed Cost per Month Cost per Cruise Cost per Passenger Vessel operating costs $ 6,600 $ 479.00 $ 3.00 Advertising $ 2,700 Administrative costs $ 5,900 $ 37.00 $ 1.50 Insurance $ 3,500 For example, vessel operating costs should be $6,600 per month plus $479.00 per cruise plus $3.00 per passenger. The company’s sales should average $29.00 per passenger. In July, the company provided 57 cruises for a total of 3,050 passengers. Required: Prepare the company’s flexible budget for…
Vice President for Sales and Marketing at Waterways Corporation is planning for production needs to meet sales demand in the coming year. He is also trying to determine how the company's profits might be increased in the coming year. This problem asks you to use cost-volume-profit concepts to help Waterways understand contribution margins of some of its products and decide whether to mass-produce any of them. Waterways markets a simple water control and timer that it mass-produces. Last year, the company sold 735,000 units at an average unit selling price of $3.60. The variable costs were $1,852,200, and the fixed costs were $508,032.
Alyeski Tours operates day tours of coastal glaciers in Alaska on its tour boat the Blue Glacier. Management has identified two cost drivers-the number of cruises and the number of passengers-that it uses in its budgeting and performance reports. The company publishes a schedule of day cruises that it may supplement with special sailings if there is sufficient demand. Up to 88 passengers can be accommodated on the tour boat. Data concerning the company's cost formulas appear below: Vessel operating costs Advertising Administrative costs Insurance Fixed Cost per Cost per Month $ 6,400 Cruise $ 479.00 Cost per Passenger $ 3.40 $ 2,900 $ 5,700 $ 3,800 $ 38.00 $ 1.50 For example, vessel operating costs should be $6,400 per month plus $479.00 per cruise plus $3.40 per passenger. The company's sales should average $32.00 per passenger. In July, the company provided 50 cruises for a total of 3,150 passengers. Required: Prepare the company's flexible budget for July. Alyeski Tours Flexible…