Question
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 87 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 | $ 6,700 | $ 476.00 | $ 3.40 |
Advertising | $ 3,000 | ||
Administrative costs | $ 5,800 | $ 35.00 | $ 1.50 |
Insurance | $ 3,600 |
For example, vessel operating costs should be $6,700 per month plus $476.00 per cruise plus $3.40 per passenger. The companys sales should average $31.00 per passenger. In July, the company provided 52 cruises for a total of 3,100 passengers.
Required:
Prepare the companys flexible budget for July.
NOTE: Options above revenue:
Cell 1: Actual cruises or budgeted cruises
Cell 2: Actual passengers or Budgeted cruises
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 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 87 passengers can be accommodated on the tour boat. Data concerning the company's cost formulas appear below: Cost per Passenger $ 3.40 Vessel operating costs Advertising Administrative costs Insurance Fixed Cost Cost per per Month Cruise $ 6,700 $ 476.00 $ 3,000 $ 5,800 $ 35.00 $ 3,600 $ 1.50 For example, vessel operating costs should be $6,700 per month plus $476.00 per cruise plus $3.40 per passenger. The company's sales should average $31.00 per passenger. In July, the company provided 52 cruises for a total of 3,100 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 Insurance Total expense Net operating income
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started