EXERCISE 9–5 Prepare a Flexible Budget with More Than One Cost Driver [LO9–5]
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:

xed Cost per Month Cost per Cruise Cost per Passenger
Vessel operating costs . . . $5,200 $480.00 $2.00
Advertising . . . . . . . . . . . . . $1,700
Administrative costs . . . . . $4,300 $24.00 $1.00
Insurance . . . . . . . . . . . . . . $2,900

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.