Camp Rainbow offers overnight summer camp programs for children ages $10$ to $14$ every summer during June and July. Each camp session is one week and can accommodate up to $200$ children. The camp is not coed, so boys attend during the odd$-$numbered weeks and girls attend during the even$-$numbered weeks. While at the camp, participants make crafts, participate in various sports, help care for the camps resident animals, have cookouts and hayrides, and help assemble toys for local underprivileged children.

The camp provides all food as well as materials for all craft classes and the toys to be assembled. One cabin can accommodate up to $10$ children, and one camp counselor is assigned to each cabin. Three camp managers are on$-$site regardless of the number of campers enrolled.

Following is the cost information for Camp Rainbows operations last summer:

Week Number of Campers Cost to Run Camp

$1162$ $ $11,070$

$215811,600$

$314410,600$

$418013,730$

$5929,000$

$619213,750$

$7968,090$

$812210,000$

E$5-16($Algo$)$ Preparing Contribution Margin Income Statement $[$LO $5-5]$

Coefficients

Intercept $3,442\mathrm{.}88$

X Variable $152\mathrm{.}62$

Suppose that Rainbow is contemplating staying open one additional week during the summer.

Required:

Using the results of the least$-$squares regression analysis, determine Rainbows contribution margin per camper if each camper pays $$163$ to attend the camp for a week.

Using the results of the least$-$squares regression analysis, prepare a contribution margin income statement for week $9$ assuming Rainbow expects to have $96$ campers that week.

Should Rainbow add a ninth week to its schedule?

Answer rating: 100% (QA)

To solve this problem we need to follow these steps 1 Determine Rainbows contribution margin per cam... View the full answer