Question

ch8 exerc 9

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 87 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	$	6,200	$	477.00	$	3.30
Advertising	$	2,800
Administrative costs	$	5,900	$	38.00	$	1.50
Insurance	$	3,500

  

For example, vessel operating costs should be $6,200 per month plus $477.00 per cruise plus $3.30 per passenger. The company’s sales should average $30.00 per passenger. The company’s planning budget for July is based on 58 cruises and 3,050 passengers.

  

Required:

Complete the company’s planning budget for July.

Alyeski Tours
Planning Budget
For the Month Ended July 31
Revenue
Expenses:
Vessel operating costs
Advertising	2,800
Administrative costs
Insurance
Total expense
Net operating income

Answer 1