Alyeski Tours operates day tours of coastal glaciers in Alaska on its tour boat the Blue Glacier. Management has identified two cos 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: Cost per Cruise $ 476.00 Cost per Passenger $3.20 Vessel operating costs Advertising Administrative costs Insurance Fixed Cost per Month $ 6,800 $ 2,400 $ 5,300 $ 3,700 $ 31.00 $ 1.50 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 53 Actual passengers 3,100 Revenue 102,300 Expenses: Vessel operating costs 41,948 Advertising 2,400 Administrative costs Insurance 3,700 Total expense 48,048 Net operating income $4 54,252
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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