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 83 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 $6,100 per month plus $476.00 per cruise plus $3.50 per passenger. The company's sales should average $32.00 per passenger. In July, the company provided 55 cruises for a total of 3,100 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 $ 6,100 $ 476.00 $ 2,100 $ 5,500 $ 35.00 $ 4,000 Vessel operating costs Advertising Administrative costs Insurance Total expense Net operating income Cost per Passenger $ 3.50 $ 1.50

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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 83 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 $6,100 per month plus $476.00 per cruise plus $3.50 per passenger. The company's
sales should average $32.00 per passenger. In July, the company provided 55 cruises for a total of 3,100 passengers.
Fixed Cost Cost per Cost per
per Month Cruise Passenger
$ 6,100 $476.00 $ 3.50
$ 2,100
$ 1.50
$ 5,500 $ 35.00
$ 4,000
Required:
Prepare the company's flexible budget for July.
Alyeski Tours
Flexible Budget
For the Month Ended July 31
Revenue
Expenses:
Vessel operating costs
Advertising
Administrative costs
Insurance
Total expense
Net operating income
Transcribed Image Text: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 83 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 $6,100 per month plus $476.00 per cruise plus $3.50 per passenger. The company's sales should average $32.00 per passenger. In July, the company provided 55 cruises for a total of 3,100 passengers. Fixed Cost Cost per Cost per per Month Cruise Passenger $ 6,100 $476.00 $ 3.50 $ 2,100 $ 1.50 $ 5,500 $ 35.00 $ 4,000 Required: Prepare the company's flexible budget for July. Alyeski Tours Flexible Budget For the Month Ended July 31 Revenue Expenses: Vessel operating costs Advertising Administrative costs Insurance Total expense Net operating income
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