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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 80 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 $5,200 $ 480.00 $ 1,700 $ 4,300 $ 24.00 $ 2,900 Cost per Passenger $2.00 $ 1.00 For example, vessel operating costs should be $5,200 per month plus $480 per cruise plus $2 per passenger. The company's sales should average $25 per passenger. In July, the company provided 24 cruises for a total of 1,400 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 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 80 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 $5,200 $ 480.00 $ 1,700 $ 4,300 $ 24.00 $ 2,900 Cost per Passenger $2.00 $ 1.00 For example, vessel operating costs should be $5,200 per month plus $480 per cruise plus $2 per passenger. The company's sales should average $25 per passenger. In July, the company provided 24 cruises for a total of 1,400 passengers. Required: Prepare the company's flexible budget for July

FINANCIAL ACCOUNTING
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 80 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 $ 5,200 $ 480.00 $ 1,700 $ 4,300 $ 24.00 $ 2,900 For example, vessel operating costs should be $5,200 per month plus $480 per cruise plus $2 per passenger. The company's sales should average $25 per passenger. In July, the company provided 24 cruises for a total of 1,400 passengers. Required: Prepare the company's flexible budget for July. Alyeski Tours Flexible Budget For the Month Ended July 311 Actual cruises Actual passengers Revenue Expenses: Vessel operating costs Advertising Cost per Passenger $ 2.00 $ 1.00 24 1,400 Required: Prepare the company's flexible budget for July. Alyeski Tours Flexible Budget For the Month Ended July 31 Actual cruisés Actual passengers Revenue Expenses: Vessel operating costs Advertising Administrative costs Insurance Total expense Net operating income $ 24 1,400 0 0
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 80 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 $ 5,200 $ 480.00 $ 1,700 $ 4,300 $ 24.00 $ 2,900 For example, vessel operating costs should be $5,200 per month plus $480 per cruise plus $2 per passenger. The company's sales should average $25 per passenger. In July, the company provided 24 cruises for a total of 1,400 passengers. Required: Prepare the company's flexible budget for July. Alyeski Tours Flexible Budget For the Month Ended July 311 Actual cruises Actual passengers Revenue Expenses: Vessel operating costs Advertising Cost per Passenger $ 2.00 $ 1.00 24 1,400 Required: Prepare the company's flexible budget for July. Alyeski Tours Flexible Budget For the Month Ended July 31 Actual cruisés Actual passengers Revenue Expenses: Vessel operating costs Advertising Administrative costs Insurance Total expense Net operating income $ 24 1,400 0 0
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