GEN COMBO LOOSELEAF INTRODUCTION TO MANAGERIAL ACCOUNTING; CONNECT AC
8th Edition
ISBN: 9781260259179
Author: BREWER
Publisher: MCG
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Chapter 9, Problem 3E
Prepare a Flexible Budget with More Than One Cost Driver
Alyeski Tours operates day tours of coastal glaciers in Alaska on its tow boat the Blue Glacer. 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 companys cost formulas appear below: 
For example, vessel operating costs should be Ss.200 per month plus $480 per cruise plus $2 per passenger. The company’s sales should average S2S per passenger. In July. the company provided 24 cruises for a total of 1,400 passengers.
Required: Using Exhibit 9−7 as your guide, prepare the company’s flexible budget for July.
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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 85 passengers can
be accommodated on the tour boat. Data concerning the company's cost formulas appear below:
ts-
Book
Hint
Vessel operating costs
Advertising
Administrative costs
Insurance
Fixed
Cost per cost per cost per
Month
Cruise Passenger
$ 3.20
$ 6,300 $ 473.00
$ 2,700
$ 33.00
$ 5,600
$ 3,600
For example, vessel operating costs should be $6,300 per month plus $473.00 per cruite plus $3.20 per passengec The company's
sales should average $33,00 per passenger. In July, the company provided 52 cruises for a total of 3.150 passengers.
Required:
Prepare the company's flexible budget for July
Alyeski Tours…
Chapter 9 Solutions
GEN COMBO LOOSELEAF INTRODUCTION TO MANAGERIAL ACCOUNTING; CONNECT AC
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