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 86 passengers can be accommodated on the tour boat. Data concerning the company's cost formulas appear below: cost per Cruise $ 478.00 Cost per Passenger $ 3.10 Vessel operating costs Advertising Administrative costs Insurance Fixed Cost per Month $ 6,400 $ 2,600 $ 5,700 $ 3,000 $ 33.00 $ 1.50 For example, vessel operating costs should be $6,400 per month plus $478.00 per cruise plus $3.10 per passenger. The company's sales should average $33.00 per passenger. In July, the company provided 54 cruises for a total of 3,050 passengers.

Answer 1

Cruises	54
Passenger	3050
Revenue	100650
Expenses
Vessel operating cost	41667
Advertising	2600
Administrative cost	12057
Insurance	3000
Total expense	59324
Net operating income	41326