Alyeski Tours operates day tours of coastal glaciers in Alaska on its tour boat the Blue Glacier. Management hasidentified two cost drivers-the number of cruises and the number of passengers-that it uses in its budgeting andperformance reports. The company publishes a schedule of day cruises that it may supplement with special sailingsif there is sufficient demand. Up to 86 passengers can be accommodated on the tour boat. Data concerning thecompany's cost formulas appear below:Cost per Passenger$ 3.20Fixed Cost per Month$ 6,500$ 2,800$ 5,400$ 3,700Cost per Cruise$ 471.00Vessel operating costsAdvertisingAdministrative costs$ 40.00$ 1.50InsuranceFor example, vessel operating costs should be $6,500 per month plus $471.00 per cruise plus $3.20 per passenger.The company's sales should average $31.00 per passenger. In July, the company provided 57 cruises for a total of3,000 passengers.Required:Prepare the company's flexible budget for July.Alyeski ToursFlexible BudgetFor the Month Ended July 31RevenueExpenses:Vessel operating costsAdvertisingAdministrative costsInsuranceTotal expenseNet operating income

Flexible Budget In simple work flexible budget which means that the changes in the variation of…

$ 3.20 Vessel operating costs Advertising Administrative costs $ 6,500 $ 2,800 $ 5,400 $ 3,700 $ 471.00 $ 40.00 $ 1.50 Insurance For example, vessel operating costs should be $6,500 per month plus $471.00 per cruise plus $3.20 per passenger. The company's sales should average $31.00 per passenger. In July, the company provided 57 cruises for a total of 3,000 passengers. Required: Prepare the company's flexible budget for July.

$ 3.20 Vessel operating costs Advertising Administrative costs $ 6,500 $ 2,800 $ 5,400 $ 3,700 $ 471.00 $ 40.00 $ 1.50 Insurance For example, vessel operating costs should be $6,500 per month plus $471.00 per cruise plus $3.20 per passenger. The company's sales should average $31.00 per passenger. In July, the company provided 57 cruises for a total of 3,000 passengers. Required: Prepare the company's flexible budget for July.

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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