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 88 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 $ 6,200 $ 477.00 $ 3.00 Advertising $ 2,600 Administrative costs $ 5,300 $ 34.00 $ 1.50 Insurance $ 3,400 For example, vessel operating costs should be $6,200 per month plus $477.00 per cruise plus $3.00 per passenger.

The companys sales should average $31.00 per passenger. In July, the company provided 58 cruises for a total of 3,100 passengers. Required: Prepare the companys flexible budget for July.

Alyeski Tours Flexible Budget For the Month Ended July 31

Actual Cruises:

Budgeted passengers:

Revenue :

Expenses:

Vessel operating costs :

Advertising :

Administrative costs :

Insurance:

Total expense :

Net operating income :