Exercise 9-5 (Algo) 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 sarings if there is sufficient demand. Up to 88 passengers can be accommodated on the tour boat. Data concerning the company's cost formulas appear below Vessel operating costs Advertising Administrative costs Insurance For example, vessel operating costs should be $6,300 per month plus $479.00 per cruise plus $310 per passenger. The company's sales should average $34.00 per passenger In July, the company provided 55 cruises for a total of 3,050 passengers. Required: Prepare the company's flexible budget for July Revenue Expenses Fixed Cost Cost per cost per per month Cruise Passengee. $0,300 $479.00 $3.30 $2,000 55,100 $37.00 $3,100 $1.50 Alyeski Tours Flexible Budget For the Month Ended July 31 Vessel operating costs Advertising Administrative costs Insurance Total expense Net operating income

Exercise 9-5 (Algo) 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 sarings if there is sufficient demand. Up to 88 passengers can be accommodated on the tour boat. Data concerning the company's cost formulas appear below Vessel operating costs Advertising Administrative costs Insurance For example, vessel operating costs should be $6,300 per month plus $479.00 per cruise plus $310 per passenger. The company's sales should average $34.00 per passenger In July, the company provided 55 cruises for a total of 3,050 passengers. Required: Prepare the company's flexible budget for July Revenue Expenses Fixed Cost Cost per cost per per month Cruise Passengee. $0,300 $479.00 $3.30 $2,000 55,100 $37.00 $3,100 $1.50 Alyeski Tours Flexible Budget For the Month Ended July 31 Vessel operating costs Advertising Administrative costs Insurance Total expense Net operating income

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter12: Activity-based Management

Section: Chapter Questions

Problem 25P: Novo, Inc., wants to develop an activity flexible budget for the activity of moving materials. Novo...

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Exercise 9-3 (Static) Prepare a Flexible Budget with More Than One Cost Driver [LO9-3] 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: Fixed 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. In July, the company provided 24 cruises for a…
TB Problem Qu. 9-401 (Algo) Cryan Jeep Tours operates jeep tours... Cryan Jeep Tours operates jeep tours in the heart of the Colorado Rockies. The company bases its budgets on two measures of activity (i.e., cost drivers), namely guests and jeeps. One vehicle used in one tour on one day counts as a jeep. Each jeep has one tour guide. The company uses the following data in its budgeting: Actual guests Actual jeeps Revenue Expenses: Revenue Tour guide wages. Vehicle expenses. Administrative expenses In May, the company budgeted for 497 guests and 202 jeeps. The company's income statement showing the actual results for the month appears below: Cryan Jeep Tours Income Statement For the Month Ended May 31 Tour guide wages Vehicle expenses Administrative expenses Total expense Net operating income Guests Jeeps Revenue Expenses: Fixed element per month $0 $0 Tour guide wages Vehicle expenses Administrative expenses Total expense Net operating income $ 5,600 $ 2,100 512 197 $ 87,854 Required:…
Prepare a Flexible Budget Performance Report Vulcan Flyovers offers scenic overflights of Mount St. Helens, the volcano in Washington State that explosively erupted in 1982. Data concerning the company’s operations in July appear below: The company measures its activity in terms of flights. Customers can buy individual tickets for overflights or hire an entire plane for an overflight at a discount. Required: 1. Using Exhibit 9–8 as your guide, prepare a flexible budget performance report for July that includes revenue and spending variances and activity variances. 2. Which of the variances should be of concern to management? Explain. Exhibit 9–8 Performance Report Combining Activity Variances with Revenue and Spending Variances
Cryan Jeep Tours operates jeep tours in the heart of the Colorado Rockies. The company bases its budgets on two measures of activity (i.e., cost drivers), namely guests and jeeps. One vehicle used in one tour on one day counts as a jeep. Each jeep has one tour guide. The company uses the following data in its budgeting: Fixed elementper month Variable elementper guest Variable element per jeep Revenue $ 0 $ 157 $ 0 Tour guide wages $ 0 $ 0 $ 167 Vehicle expenses $ 5,000 $ 9 $ 64 Administrative expenses $ 1,500 $ 8 $ 0 In May, the company budgeted for 467 guests and 172 jeeps. The company's income statement showing the actual results for the month appears below: Cryan Jeep Tours Income Statement For the Month Ended May 31 Actual guests 482 Actual jeeps 167 Revenue $ 65,854 Expenses: Tour guide wages 28,357 Vehicle expenses 17,640 Administrative expenses 4,888 Total expense 50,885 Net operating…
Bruer Jeep Tours operates jeep tours in the heart of the Colorado Rockies. The company bases its budgets on two measures of activity (i.e., cost drivers), namely guests and jeeps. One vehicle used in one tour on one day counts as a jeep. Each jeep has one tour guide. The company uses the following data in its budgeting: Revenue Tour guide wages Vehicle expenses Administrative expenses Fixed element Variable element per Variable element per per month guest jeep $ 0 $ 179 $ 0 $ 0 $ 0 $ 180 $ 5,800 $ 2,900 $ 19 $ 10 $ 57 $ 0 In November, the company budgeted for 366 guests and 161 jeeps. The actual activity for the month was 382 guests and 148 jeeps. Required: Prepare a report showing the company's activity variances for November. Label each variance as favorable (F) or unfavorable (U). Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Guests Jeeps Revenue…
Mcinerney Jeep Tours operates jeep tours in the heart of the Colorado Rockies. The company bases its budgets on two measures of activity (i.e., cost drivers), namely guests and jeeps. One vehicle used in one tour on one day counts as a jeep. Each jeep has one tour guide. The company uses the following data in its budgeting: Fixed elementper month Variable elementper guest Variable element per jeep Revenue $ 0 $ 161 $ 0 Tour guide wages $ 0 $ 0 $ 132 Vehicle expenses $ 4,600 $ 22 $ 75 Administrative expenses $ 3,300 $ 15 $ 0 In October, the company budgeted for 339 guests and 105 jeeps. The actual activity for the month was 410 guests and 152 jeeps. Required: Prepare the company's flexible budget for the actual level of activity in October.
View prevlous attempt Exercise 13-44 (Algo) Budgeting in a Service Organization: Solve for Unknown (LO 13-7) Jolly Cleaners offers residential and commercial cleaning services. Clients pay a fixed monthly fee for the service, but can cancel the service at the end of any month. In addition to the employees who do the actual cleaning, the firm includes two managers who handle the administrative tasks (human resources, accounting, and so on) and one dispatcher, who assigns the cleaning employees to jobs on a daily basis, On average, residential clients pay $280 per month for cleaning services and the commercial clients pay $1,400 per month. A typical residential client requires 10 hours a month for cleaning and a typical commercial client requires 50 hours a month. In March, Jolly Cleaners had 40 commercial clients and 200 residential clients. Cleaners are paid $10 per hour and are only paid for the hours actually worked. Supplies and other varlable costs are estimated to cost $5 per hour…
Question 3 ANSWER ALL PARTS OF THE QUESTION 1. Please explain the characteristics of the relevant cost and give two examples of the irrelevant cost. 2. “The Traditional budget enables better cost control within firms”, discuss the previous statement with giving two examples of the main alternative budgets systems that you learn this year. 3. London Manufacturing Limited developed the following standard costs for direct material and direct labour for one of their major products, the 40 litres heavy-duty plastic container. Each container requires the following: Types of Cost Standard quantity Standard price Direct labour 0.2 hours £18 per hour During March, London…
(a) Al Khoud Training Center (KTC) is an industrial training company operating in Muscat Knowledge Oasis. Following increased competition and customer expectations, KTC has been forced to revisit its operational strategy and its quality standards. The following budgeted data for 2022 are available: Number of Trainees 5,500 Operating Income OMR24,000 Budgeted Variable Cost per Trainee Trainee's Support Service Training Materials Foods Budgeted Fixed Cost per Training 14,800 13,000 OMR16 Facilities OMR21 Salaries OMR20 OMR10 Miscellaneous Products & Services Based on the customer survey it conducted, KTC has learned that several improvements to its products and services are required. The improvements would provide the following impacts: Increase in the Number of Trainees 30% Increase in the Total Variable Costs 25% Increase in the Total Fixed Costs 25% You are required to: (1) Calculate the budgeted revenue per trainee based on the available data. (i) Assuming that budgeted revenue per…
Exercise 9-3 Prepare a Flexible Budget with More Than One Cost Driver [LO9-3] 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: Fixed Cost per Month Cost per Cruise Cost per Passenger $475.00 Vessel operating costs Advertising $ 6,700 $ 2,800 $3.00 $1.50 Administrative costs $39.00 $5,200 $3,900 Insurance For example, vessel operating costs should be $6,700 per month plus $475.00 per cruise plus $3.00 per passenger. The company's sales should average $33.00 per passenger. In July, the company provided 59 cruises for a total of 3,000 passengers.
NEED HELP ASAP!!!! Cryan Jeep Tours operates jeep tours in the heart of the Colorado Rockies. The company bases its budgets on two measures of activity (i.e., cost drivers), namely guests and jeeps. One vehicle used in one tour on one day counts as a jeep. Each jeep has one tour guide. The company uses the following data in its budgeting: Fixed element per month Variable element per guest Variable element per jeep $0 $ 287 $0 Tour guide wages $0 $0 $ 154 Vehicle expenses $ 6,300 $ 22 $77 Administrative expenses $ 2,800 $ 21 $0 In May, the company budgeted for 532 guests and 237 jeeps. The company's income statement showing the actual results for the month appears below: Revenue Cryan Jeep Tours Income Statement For the Month Ended May 31 Actual guests Actual jeeps Revenue Expenses: Tour guide wages Vehicle expenses Administrative expenses Total expense Net operating income 547 232 $ 122,854 38,757 24,140 11,388 74,285 $ 48,569 Required: Prepare a report showing the company's revenue…
Novo, Inc., wants to develop an activity flexible budget for the activity of moving materials. Novo uses eight forklifts to move materials from receiving to stores. The forklifts are also used to move materials from stores to the production area. The forklifts are obtained through an operating lease that costs 18,000 per year per forklift. Novo employs 25 forklift operators who receive an average salary of 50,000 per year, including benefits. Each move requires the use of a crate. The crates are used to store the parts and are emptied only when used in production. Crates are disposed of after one cycle (two moves), where a cycle is defined as a move from receiving to stores to production. Each crate costs 1.80. Fuel for a forklift costs 3.60 per gallon. A gallon of gas is used every 20 moves. Forklifts can make three moves per hour and are available for 280 days per year, 24 hours per day (the remaining time is downtime for various reasons). Each operator works 40 hours per week and 50 weeks per year. Required: 1. Prepare a flexible budget for the activity of moving materials, using the number of cycles as the activity driver. 2. Calculate the activity capacity for moving materials. Suppose Novo works at 80 percent of activity capacity and incurs the following costs: Prepare the budget for the 80 percent level and then prepare a performance report for the moving materials activity. 3. Calculate and interpret the volume variance for moving materials. 4. Suppose that a redesign of the plant layout reduces the demand for moving materials to one-third of the original capacity. What would be the budget formula for this new activity level? What is the budgeted cost for this new activity level? Has activity performance improved? How does this activity performance evaluation differ from that described in Requirement 2? Explain.