Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Exercise 9-5 (Algo) Prepare a Flexible Budget with More Than One Cost Driver [LO9-5] Alyeski Tours operates day tours of coastal glaciers in Alaska
Exercise 9-5 (Algo) Prepare a Flexible Budget with More Than One Cost Driver [LO9-5] Alyeski Tours operates day tours of coastal glaciers in Alaska on its tour boat the Blue Glacier. Management identified two cost drivers for budgeting purposes-the number of cruises and the number of passengers. The company publishes a schedule of day cruises that it may supplement with special sailings if there is sufficient demand. Up to 82 passengers can be accommodated on the tour boat. Dat concerning the company's cost formulas appear below: Vessel operating costs Advertising Fixed Cost per Cost per Cost per Month Cruise Passenger $ 6,500 $ 476.00 $ 3.40 $ 2,400 Administrative costs Insurance $ 5,400 $ 38.00 $ 3,800 $ 1.50 For example, vessel operating costs should be $6,500 per month plus $476.00 per cruise plus $3.40 per passenger. The company's sales should average $35.00 per passenger. In July, the company provided 56 cruises for a total of 3,150 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 expenses Net operating income
Step by Step Solution
There are 3 Steps involved in it
Step: 1
To prepare the flexible budget for Alyeski Tours for the month of July we need to calculate each exp...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started