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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 driversthe number of

Alyeski Tours operates day tours of coastal glaciers in Alaska on its tour boat the Blue Glacier. Management has identified two cost driversthe number of cruises and the number of passengersthat 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: Fixed Cost per Month Cost per Cruise Cost per Passenger Vessel operating costs $ 5,200 $ 480.00 $ 2.00 Advertising $ 1,700 Administrative costs $ 4,300 $ 24.00 $ 1.00 Insurance $ 2,900 For example, vessel operating costs should be $5,200 per month plus $480 per cruise plus $2 per passenger. The companys sales should average $25 per passenger. In July, the company provided 24 cruises for a total of 1,400 passengers.

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