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 boat. Data concerning the company's cost formulas appear below: Vessel operating costs Advertising Administrative costs Insurance Fixed Cost per Cost per Cost per Month Cruise Passenger $ 3.30 $ 6,600 $ 471.00 $ 2,100. $ 5,600 $ 33.00 $1.50 $ 3,500 For example, vessel operating costs should be $6,600 per month plus $471.00 per cruise plus $3.30 per passenger. The company's sales should average $29.00 per passenger. In July, the company provided 56 cruises for a total of 3,050 passengers.
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 boat. Data concerning the company's cost formulas appear below: Vessel operating costs Advertising Administrative costs Insurance Fixed Cost per Cost per Cost per Month Cruise Passenger $ 3.30 $ 6,600 $ 471.00 $ 2,100. $ 5,600 $ 33.00 $1.50 $ 3,500 For example, vessel operating costs should be $6,600 per month plus $471.00 per cruise plus $3.30 per passenger. The company's sales should average $29.00 per passenger. In July, the company provided 56 cruises for a total of 3,050 passengers.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter7: Allocating Costs Of Support Departments And Joint Products
Section: Chapter Questions
Problem 34P: AirBorne is a small airline operating out of Boise, Idaho. Its three flights travel to Salt Lake...
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