: 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

: 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 81 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
$476.00
Vessel operating costs
Advertising
Administrative costs
$ 6,800
$ 2,400
$ 5,300
$3,700
$3.20
$ 31.00
$1.50
Insurance
For example, vessel operating costs should be $6,800 per month plus $476.00 per cruise plus $3.20 per passenger. The company’s
sales should average $33.00 per passenger. In July, the company provided 53 cruises for a total of 3,100 passengers.
Required:
Prepare the company’s flexible budget for July.
Alyeski Tours
Flexible Budget
For the Month Ended July 31
Actual cruises
Actual passengers
Revenue
Expenses:
Vessel operating costs
Advertising
Administrative costs
Insurance
Total expense
Net operating income