Question

Required information 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-numbered 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 Week 1 2 Number of Campers 116 138 a un town Cost to Run Camp $9,330 11,300 12,200 8,000 8,530 10,390 9,830 8,950 co

Answer 1

1) Using the results of the least-squares regression analysis, determine Rainbow's contribution margin per camper if each camper pays $155 to attend the camp for a week
Selling price	$ 155.00
Less: Variable cost per unit	$ 60.85
Contribution Margin per unit	$ 94.15	Per Camper
Contribution Margin Ratio = $94.15/$155	60.74%
2)
Camp Rainbow
Contribution Margin Income Statement
For Possible 9th Week
Sales Revenue (140 x $155)	$ 21,700.00
Less: Variable Costs (140 x $60.85)	$ 8,519.00
Contribution Margin (140 x $94.15)	$ 13,181.00
Less: Fixed Cost	$ 2,587.25
Net operating Income	$ 10,593.75
3)
Yes, Rainbow should add the 9th week to its schedule because it will generate income for the camp.