1. The local government is running a flu vaccination program. Are the following costs fixed, variable, or step costs?

(a) Costs of occupancy

(b) Costs of management

(c) Costs of part-time employee salaries based on service volume

(d) Costs of vaccine consumed

2. Clifftown's Parks and Recreation Department is introducing a new summer program for children in elementary school. Programming runs from 8:00 a.m. to 5:00 p.m., Monday through Friday. The proposed camp is 10 weeks long and is planned for 50 children. Fixed costs, which include equipment and facilities costs, are estimated at $5,000 for 10 weeks. The facilities and equipment can accommodate up to 100 children per week, which is the maximum the department is willing to enroll in any given session. There will be 5 camp counselors each week for the 50 children, at a total cost of $2,000 per week for the 5 counselors. The department is comfortable with each counselor being responsible for 11 children. Any more than that and an additional counselor will need to be hired. The camp will serve lunch and snacks on each weekday, at a weekly cost of $15.

(a) Identify the fixed, step, and variable costs.

(b) What would be the cost of the program for 50 children?

(c) What would be the cost of the program for 75 children?

3. Desert Vista Homeless Campus provides shelter and breakfast to individuals in need. Local governments and several nonprofit organizations provide financial assistance to the shelter and require weekly reporting. Desert Vista's current facility can hold a maximum of 300 people. The base weekly cost to run the shelter is $1,500. The shelter also needs 3 cooks per 75 residents to prepare a sufficient amount of food for breakfast. Cooks are paid a flat fee of $50 for each meal prepared. Breakfast costs an average of $2 per meal to prepare, excluding staff costs.

(a) Identify the fixed, step, and variable costs.

(b) What is the cost incurred by the campus for 150 people over a 1-week period?

(c) What is the cost incurred by the campus for 200 people over a 1-week period?