A2 ### Alyeski Tours Budget AnalysisAlyeski Tours operates day tours of coastal glaciers in Alaska on its tour boat, the Blue Glacier. Management uses two cost drivers for budgeting: the number of cruises and the number of passengers. The company publishes a schedule of day cruises and offers additional sailings based on demand, with a maximum capacity of 88 passengers per tour.#### Cost Structure**Fixed and Variable Costs**- **Vessel Operating Costs**: - Fixed Cost per Month: $6,600 - Cost per Cruise: $480 - Cost per Passenger: $3.00- **Advertising**: - Fixed Cost per Month: $2,000- **Administrative Costs**: - Fixed Cost per Month: $5,300 - Cost per Passenger: $1.50- **Insurance**: - Fixed Cost per Month: $3,300#### Example CalculationFor example, vessel operating costs are calculated as $6,600 monthly plus $480 per cruise and $3.00 per passenger. The company aims for sales averaging $33.00 per passenger. In July, Alyeski Tours conducted 50 cruises with a total of 3,100 passengers.#### Required TaskPrepare the company's flexible budget for July.#### Flexible Budget Template**Alyeski Tours Flexible Budget**For the Month Ended July 31- **Revenue**- **Expenses**: - Vessel Operating Costs - Advertising - Administrative Costs - Insurance**Total Expense****Net Operating Income**

Budgets are the statements prepared by the entity for the purpose of estimating the costs relating…

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 Required: Prepare the company's flexible budget for July. For example, vessel operating costs should be $6,600 per month plus $480.00 per cruise plus $3.00 per passenger. The company's sales should average $33.00 per passenger. In July, the company provided 50 cruises for a total of 3,100 passengers. Alyeski Tours Flexible Budget For the Month Ended July 31 Revenue Expenses: Fixed Cost per Cost per Month $6,600 $ 2,600 $5,300 $ 3,300 Vessel operating costs Advertising Administrative costs Insurance Total expense Net operating income $ Cruise $ 480.00 $ 33.00 0 0 Cost per Passenger $3.00 $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 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 Required: Prepare the company's flexible budget for July. For example, vessel operating costs should be $6,600 per month plus $480.00 per cruise plus $3.00 per passenger. The company's sales should average $33.00 per passenger. In July, the company provided 50 cruises for a total of 3,100 passengers. Alyeski Tours Flexible Budget For the Month Ended July 31 Revenue Expenses: Fixed Cost per Cost per Month $6,600 $ 2,600 $5,300 $ 3,300 Vessel operating costs Advertising Administrative costs Insurance Total expense Net operating income $ Cruise $ 480.00 $ 33.00 0 0 Cost per Passenger $3.00 $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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