Login Register


Planning Budget


7.       Alyeski Tours operates day tours of coastal glaciers in Alaska on its tour boat the Blue Glacier. Man-agement has identifiedtwo 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 boat. Data concerning the company’s cost formulas appear below: Fixed Cost per Month Cost per Cruise Cost per Passenger Vessel operating costs . . . $ 5,200 Administrative costs . . . . . $ 4,300 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. The company’s planning budget for July is based on 24 cruises and 1,400 passengers. Required: Prepare the company’s planning budget for July.