Selecting the appropriate time period for cost averaging The Vaughan Amusement Park is considering signing a contract to hire a circus at a cost of $2,400 per day. The contract requires a minimum performance period of one week. Estimated circus attendance is as follows: 

.:.

Required

a. For each day, determine the average cost of the circus contract per person attending.

b. Suppose that the park prices circus tickets at cost as computed in Requirement a plus $1.60. What would be the price per ticket charged on each day of the week?

c. Use weekly averaging to determine a reasonable price to charge for the circus tickets.

d. Comment on why weekly averaging may be more useful to business managers than daily averaging. 

Transcribed Image Text:

Monday Tuesday Thursday Friday Saturday Sunday Wednesday 450 500 450 600 950 1,400 1,500