Alyeski Tours operates day tours of coastal glaciers in Alaska on its tour boat the Blue Glacier. Management identified two cost drivers for budgeting purposes-the number of cruises and the number of passengers. 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. Datá concerning the company's cost formulas appear below: Vessel operating costs Advertising Fixed Cost per Cost per Cost per Month Cruise Passenger $ 6,500 $ 476.00 $ 3.40 $ 2,400 Administrative costs Insurance $5,400 $38.00 $ 3,800 $ 1.50 For example, vessel operating costs should be $6,500 per month plus $476.00 per cruise plus $3.40 per passenger. The company's sales should average $35.00 per passenger. In July, the company provided 56 cruises for a total of 3,150 passengers. Required: Prepare the company's flexible budget for July.
Alyeski Tours operates day tours of coastal glaciers in Alaska on its tour boat the Blue Glacier. Management identified two cost drivers for budgeting purposes-the number of cruises and the number of passengers. 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. Datá concerning the company's cost formulas appear below: Vessel operating costs Advertising Fixed Cost per Cost per Cost per Month Cruise Passenger $ 6,500 $ 476.00 $ 3.40 $ 2,400 Administrative costs Insurance $5,400 $38.00 $ 3,800 $ 1.50 For example, vessel operating costs should be $6,500 per month plus $476.00 per cruise plus $3.40 per passenger. The company's sales should average $35.00 per passenger. In July, the company provided 56 cruises for a total of 3,150 passengers. Required: Prepare the company's flexible budget for July.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Exercise 9-5 (Algo) Prepare a Flexible Budget with More Than One Cost Driver [LO9-5]
Alyeski Tours operates day tours of coastal glaciers in Alaska on its tour boat the Blue Glacier. Management identified two cost drivers
for budgeting purposes-the number of cruises and the number of passengers. 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.
Datá concerning the company's cost formulas appear below:
Vessel operating costs
Advertising
Administrative costs
Insurance
Fixed
Cost per Cost per Cost per
Month Cruise Passenger
$ 6,500 $ 476.00 $ 3.40
$ 2,400
$ 5,400 $ 38.00
$ 3,800
$ 1.50
For example, vessel operating costs should be $6,500 per month plus $476.00 per cruise plus $3.40 per passenger. The company's
sales should average $35.00 per passenger. In July, the company provided 56 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:
Vessel operating costs
Advertising
Administrative costs
Insurance
Total expenses
Net operating income](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd5be8664-42a2-40d7-b739-bf9e7b155d42%2F75affb34-e425-4c7c-813a-f46a7550c8bb%2Fm2unqth_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Exercise 9-5 (Algo) Prepare a Flexible Budget with More Than One Cost Driver [LO9-5]
Alyeski Tours operates day tours of coastal glaciers in Alaska on its tour boat the Blue Glacier. Management identified two cost drivers
for budgeting purposes-the number of cruises and the number of passengers. 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.
Datá concerning the company's cost formulas appear below:
Vessel operating costs
Advertising
Administrative costs
Insurance
Fixed
Cost per Cost per Cost per
Month Cruise Passenger
$ 6,500 $ 476.00 $ 3.40
$ 2,400
$ 5,400 $ 38.00
$ 3,800
$ 1.50
For example, vessel operating costs should be $6,500 per month plus $476.00 per cruise plus $3.40 per passenger. The company's
sales should average $35.00 per passenger. In July, the company provided 56 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:
Vessel operating costs
Advertising
Administrative costs
Insurance
Total expenses
Net operating income
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