Exercise 9-3 (Algo) Prepare a Flexible Budget with More Than One Cost Driver [LO9-3] 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 Fixed Cost per Month Cost per Passenger $ 3.50 $ 6,800 Cost per Cruise $ 479.00 $ 2,200 $ 5,700 $ 3,800 $ 30.00 $ 1.50 Insurance For example, vessel operating costs should be $6,800 per month plus $479.00 per cruise plus $3.50 per passenger. The company's sales should average $33.00 per passenger. In July, the company provided 53 cruises for a total of 3,050 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 Prov 3 of 14 ++ Next

Exercise 9-3 (Algo) Prepare a Flexible Budget with More Than One Cost Driver [LO9-3] 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 Fixed Cost per Month Cost per Passenger $ 3.50 $ 6,800 Cost per Cruise $ 479.00 $ 2,200 $ 5,700 $ 3,800 $ 30.00 $ 1.50 Insurance For example, vessel operating costs should be $6,800 per month plus $479.00 per cruise plus $3.50 per passenger. The company's sales should average $33.00 per passenger. In July, the company provided 53 cruises for a total of 3,050 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 Prov 3 of 14 ++ Next

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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B D. You will prepare a static master budget, budgeted financial statements and a flexible budget/variance analysis for Karry No Key, Inc. which will sell karaoke machines. 5 Assumptions: You plan to form Karry No Key on April 1 and expect the following: 6 1. Invest in exchange for stock 2. Purchase delivery truck with cash with $0 salvage value and expected useful life in years 9 3. Sales increase per month 100,000 60,000 8 10 2% Collections in month of sale 69% Collections of remainder in following month of sale 2 4. Desired ending inventory (% of next month's expected sales) Payments in month of purchase Payments of remainder in following month of purchase 5 5. Other operating expenses per month to be paid in month incurred 1 31% 20% 3 10% 4 90% 49,000 Requirement 1: Complete the Sales Budget and Cash Collections for April - June and the quarter in total using applicable assumptions above. Sales Budget April May June Total 1st Quarter April Sales in units 1960 Price per unit $ 98.00…
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Question Toy Plc. makes special toy cars which it sells to retailers for K25, 000 per toy car. Retailers sell the toy cars to consumers for K40, 000 each. Budgeted information for the following year: Production and sales 200, 000 toy cars Fixed overhead K2, 400, 000, 000 Variable costs per toy car K6, 500 Recently, the retailer has started using their buyer power over Toy Plc. demanding a discount off the existing price charged to them. Directors of Toy plc. fear that they may lose business if they do not offer some discount to their customers and have asked for advice from a market research consultancy firm. The consultants have suggested that Toy plc. need to reduce the selling price charged to retailers by a minimum of 10% if they are to retain existing customers. The consultants however, believe that Toy plc. can use some buyer power of their own over the suppliers of materials such that the variable cost per toy car would fall by 5%. Based…
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