Energy Experiences Pty Ltd runs camps for school children and sporting clubs that provide 3 days of canoeing, horseriding, abseiling and skiing. As a graduate with a sports and recreation degree, you have eventually worked your way up to managing the camps. The accountant has presented you with the following income statement and wants to work with you to improve the company’s financial position so that it may continue in business.

	Amount			Percentage
Sales revenue (2500 campers) Variable cost of sporting activities Variable promotional and other expenses	$	750000 375000 150000			100 50  20
Contribution margin		225000			30
Fixed expenses:
Selling and site maintenance Administrative Finance and other		150000 75000   75000			20 10  10
		300000			40
Loss	$	(75000	)		(10	)

Required

A. Taking into account the nature of the activities provided by Energy Experiences Pty Ltd, what costs are likely to be fixed regardless of the number of campers and what costs are likely to vary in total with the number of campers?

B. Suggest specific ways in which the company could make a profit by changing its pricing, reducing fixed costs and reducing variable costs.