Gadubhai 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 driversfor budgeting purposes-the number of cruises and the number of passengers. The company publishes a schedule of day cruises thatit may supplement with special sailings if there is sufficient demand. Up to 82 passengers can be accommodated on the tour boat.Datá concerning the company's cost formulas appear below:Vessel operating costsAdvertisingAdministrative costsInsuranceFixedCost per Cost per Cost perMonth Cruise Passenger$ 6,500 $ 476.00 $ 3.40$ 2,400$ 5,400 $ 38.00$ 3,800$ 1.50For example, vessel operating costs should be $6,500 per month plus $476.00 per cruise plus $3.40 per passenger. The company'ssales 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 ToursFlexible BudgetFor the Month Ended July 31RevenueExpenses:Vessel operating costsAdvertisingAdministrative costsInsuranceTotal expensesNet operating income

Flexible budget net operating income = Total Revenue - Total expenses

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. Datá 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 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. Datá 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.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter9: Profit Planning And Flexible Budgets

Section: Chapter Questions

Problem 50E: Use the following information for Exercises 9-50 and 9-51: Assume that Stillwater Designs produces...

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