Question

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 82 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 $3.10 Vessel operating costs Advertising Administrative costs $ 6,600 2,100 $5,200 $ 3,400 $ 477.00 $ 36.00 $1.50 Insurance For example, vessel operating costs should be $6,600 per month plus $47700 per cruise plus $3.10 per passenger. The company's sales should average $32.00 per passenger. In July, the company provided 53 cruises for a total of 3,050 passengers

Answer 1

Particular
Actual cruises	53
Actual pessangers	3,050
Revenue (3,050 × 32)	97,600
Expense:
Vessel operating cost	41,336
Advertising	2,100
Administrative cost	11,683
Insurance	3,400
Total expense	58,519
Net operating income	39,081