Camp Sunshine offers overnight summer camp programs for children ages 10-14 every summer during June and July.

Question:

Camp Sunshine offers overnight summer camp programs for children ages 10-14 every summer during June and July. Each camp session is one week and can accommodate up to 100 children. The camp is not coed, so hoys 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 camp’s 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 Sunshine’s operations last summer:

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Required:

1. For each of the following items, identify whether the cost is variable, fixed, mixed, step- variable, or step-fixed. State any assumptions you make.

a. Cost of meals for campers.

b. Cost of camp counselor wages.

c. Cost of crafting materials.

d. Depreciation on the cabins.

e. Feed for the camp animals.

f. Electricity for the camp.

g. Camp managers’ salaries.

h. Cost of toys to be assembled by campers.

i. Housekeeping (e.g., cleaning cabins between sessions, laundering bed linens).

2. Prepare a scattergraph of Camp Sunshine’s operating cost and draw the line you believe best fits the data.

3. Based on this graph, estimate Camp Sunshine’s total fixed costs per month.

4. Using the high-low method, calculate Camp Sunshine’s total fixed operating costs and variable operating cost per child.

5. Using the high-low method results, calculate the camp’s expected operating cost if 85 children attend a session.

Step by Step Answer:

Related Book For  book-img-for-question

Managerial Accounting

ISBN: 9780078110771

1st Edition

Authors: Stacey WhitecottonRobert LibbyRobert Libby, Patricia LibbyRobert Libby, Fred Phillips

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