Chegg, Can you please help me with questions E and F on CVP analysis. I would really appreciate if you can answer all the questions and show me step by step how you arrive at those answers. Also, you mind explaining in detail questions i and ii on part E and questions iii on part F. It would help me a lot for my assignment.

Adventure Expeditions offers guided back-country hiking/camping trips in Colombia Andes. Adventure provides a guide and all necessary food and equipment at a fee of $50 per person per day. Adventure currently provides an average of 600 guide-days per month in June, July, August, and September. Based on available equipment and staff, maximum capacity is 800 guide-days per month. Monthly variable and xed operating costs are as follows:

Variable Costs Per Person Fixed Costs

Food $5 Equipmental Rental $5,000

Guide salary 25 Administration 5,000

Supplies 2 Advertising 2,000

Insurance 8 Total $12,000

Total $40

E. An Alberta outdoor supply company has offered to supply all necessary food and camping equipment at $7.50 per guide-day. This eliminates the current food costs and reduces the monthly

equipment rental costs to $1,800.

Cost to make Cost to buy

Cost to buy

Cost to make:

Food

Equipment rental

Total Costs

i) What is the advantage or disadvantage of buying

ii) Should the offer be accepted?Why ?

F. Clients currently must carry a backpack and assist in camp activities such as cooking. Adventure is considering the addition of mules to carry all food and equipment and the hiring of college students to perform camp activities such as cooking. This will increase variable costs by $12 per guide-dayand xed costs by $1,000 per month. However, 600 full-service guide-days per month could now be sold at $75 each.

i) Calculate increase in revenue:

a. Full service

b. Current service

ii) Additional costs

a. Variable

b. Fixed

iii) What is the advantage or disadvantage of selling without the inserts.