Question: Question Answer 1. What are the total variable costs for the trip? Total variable cost for the trip ($40*8) +$168*6 = $2928 2. What are

Question

Answer

1. What are the total variable costs for the trip?

Total variable cost for the trip

($40*8) +$168*6 = $2928

2. What are the average variable costs (per person) for the trip?

Total fixed costs for the trip

($40*8) + $168 = $488

3. What are the total fixed costs for the trip?

$1400 +$270 = $1670

4. What are the average fixed costs (per person) for the trip?

Average fixed costs = $1,670/6 = $278.33

5. What are the average costs per person for the trip?

Average costs per person for the trip

$488 + $278.33

=$766.33

6. What would the trip cost Glenda if she were to go alone?

$488 +$1,670 = $2,158

7. What additional costs would be incurred if a 7th girl was invited on the trip? Would this be a wise decision

(from a cost perspective)? Why or why not?

8. Which cost will not be affected if a 7th girl was invited on the trip?

7. What additional cost would be incurred if.?

  • The gasoline cost and rental cost will be incurred if the 7th girl was invited because they have to rent a new higher capacity car that can fit for 7 people. Therefore, it is not a wise decision due to the addition payment that they need to pay.

8. Which cost will not be affected if a 7th girl was invited on the trip?

  • Condominium rental will not affected since it is fixed cost and because condo can fit for maximum of 7 people. Hence, you no need to rent a new room.

Glenda is planning a trip of 8 days to Florida. She has located a condominium and has put a deposit down on the unit. The rental company has a maximum occupancy for the condominium of 7 adults. There is an amusement park that she plans to visit. She is going to use her parents car, an SUV that can carry up to 6 people and their luggage. The SUV can travel an average of 9.4L/100km, the total distance is approximately 1,780 (travelling there plus driving around every day), and the average price of gas is $1.6 per litre. A season pass for an amusement park she wants to visit is $168 per person. Glenda estimates spending $40 per day per person for food. She estimates the costs for the trip as follows:

Condo Rental

$1,400

Gasoline

$270

Food (per person, per day)

$40

Amusement Park Season Pass (per person)

$168

(This one is the question)

No. of people incl. Glenda

Total Variable Cost

Average Variable Cost

Total Fixed Cost

Average Fixed Cost

Average Cost per Person

1

2

3

4

5

6

7

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