Question

Exercise 9-3 Prepare a Flexible Budget with More Than One Cost Driver (LO9-3) 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 80 passengers can be accommodated on the tour boot. Data concerning the company's cost formulas appear below: Cost per Passenger $2.00 Vessel operating costs Advertising Administrative costs Insurance Fixed cost per Month Coat per Cruise $ 5,200 $ 480.00 $1.700 $ 4,300 $ 24.00 $ 2.900 $1.00 For example, vessel operating costs should be $5,200 per month plus $480 per cruise plus $2 per passenger. The company's sales should average $25 per passenger. In July, the company provided 24 cruises for a total of 1.400 passengers

Answer 1

Solution:

Alyeski Tours
Flexible Budget
For the month ended July 31
Particulars	Amount
Nos of cruises	24
Nos of passangers	1400
Revenue	$35,000.00
Expenses:
Vessel operating costs	$19,520.00
Advertising	$1,700.00
Administrative costs	$6,276.00
Insurance	$2,900.00
Total expense	$30,396.00
Net operating income	$4,604.00