Question

Camp Rainbow offers overnight summer camp programs for children ages 10-14 every summer during June and July. Each camp session is one week and can accommodate up to 200 children. The camp is not coed, so boys attend during the odd-numbered weeks and girls attend during the even- Pumbered weeks. While at the camp, participants make crafts, participate in Various sports, help care for the camp's resident animals, have cookouts and hayrides, and help assemble toys for local underprivileged children. The camp provides all food as well as materials for all craft classes and the toys to be assembled. One cabin can accommodate up to 10 children, and one camp counselor is assigned to each cabin. Three camp managers are on site regardless of the number of campers enrolled. Following is the cost information for Camp Rainbow's operations last summer: WeekNumber of CampersCost to Run Camp 162 $11,070 158 11,600 144 10,600 180 13,730 92 9,000 192 13,750 8,090 122 10,000 96 Required: 4. Using the high-low method, calculate Camp Rainbow's total fixed operating costs and variable operating cost per child. 5. Using the high-low method results, calculate the camp's expected operating cost if 96 children attend a session.

Answer 1

4)

Variable operating cost = Highest number of campers-Lowest number of campers Highest cost to run camp-lowest cost to run camp

192 - 92 Variable operating cost = 13750 - 8090

Fixed cost = Cost to run camp during highest number of campers - variable operating cost $\times$ Campers at highest cost

Fixed cost = $13,750 - 0.018 $\times$ 192

Fixed cost = $ 13,746.5

Total cost = Fixed cost + variable cost

Total cost = $ 13,746.5 + 0.018 $\times$ Number of campers

--------------------------------------------------------------------------------------------------------

5)

Total cost if 96 children attend a session is calculated as:-

Total cost = $ 13,746.5 + 0.018 $\times$ 96

Total cost = $ 13,748.2