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 90 passengers can be accommodated on the tour boat. Data concerning the company’s cost formulas appear below: Fixed Cost per MonthCost per CruiseCost per PassengerVessel operating costs$ 6,700$ 472.00$ 3.40Advertising$ 2,500 Administrative costs$ 5,300$ 36.00$ 1.50Insurance$ 3,700 For example, vessel operating costs should be $6,700 per month plus $472.00 per cruise plus $3.40 per passenger. The company’s sales should average $28.00 per passenger. In July, the company provided 55 cruises for a total of 3,050 passengers. Required:Prepare the company’s flexible budget for July. sales should average $28.00 per passenger. In July, the company provided 55 cruises for a total of 3,050 passengers.Required:Prepare the company's flexible budget for July.Alyeski ToursFlexible BudgetFor the Month Ended July 31RevenueExpenses:Vessel operating costsAdvertisingAdministrative costsInsuranceTotal expenseNet operating income

A flexible budget predicts how the revenues and expenses will change in response to changes in the…

Answered: Alyeski Tours operates day tours of…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter8: Budgeting For Planning And Control

Section: Chapter Questions

Problem 13CE: Nashler Company has the following budgeted variable costs per unit produced: Budgeted fixed overhead...

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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 90 passengers can be accommodated on the tour boat. Data concerning the company’s cost formulas appear below:

	Fixed Cost per Month	Cost per Cruise	Cost per Passenger
Vessel operating costs	$ 6,700	$ 472.00	$ 3.40
Advertising	$ 2,500
Administrative costs	$ 5,300	$ 36.00	$ 1.50
Insurance	$ 3,700

For example, vessel operating costs should be $6,700 per month plus $472.00 per cruise plus $3.40 per passenger. The company’s sales should average $28.00 per passenger. In July, the company provided 55 cruises for a total of 3,050 passengers.

Required:

Prepare the company’s flexible budget for July.