Question

Required information E5-13, E5-14 and E5-16 [LO 5-2,5-3,5-4,5-5) [The following information applies to the questions displayed below.) 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. The results of the least-squares regression of the number of campers and the cost to run camp are given below. Following is the cost information for Camp Rainbow's operations last summer: Week 1 2 3 4 5 6 T 8 Number of Cost to Run Campers Camp 90 $8,050 118 8,460 156 10,900 174 11,100 188 13,670 184 14,300 170 12,325 156 11,270 E5-13 (Static) Estimating Cost Behavior Using Scattergraph and High-Low Methods [LO 5-2,5-3) 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 170 children attend a session. Complete this question by entering your answers in the tabs below. Required 4 Required 5 Using the high-low method, calculate Camp Rainbow's total fixed operating costs and variable operating cost per child. (DO not round your intermediate calculations and Round your final answers to 2 decimal places.) Fixed Cost Variable Cost per Child Required Required 5

Answer 1

4.

Cost at highest activity = $13,670

Cost at lowest activity = $8,050

Variable operating cost per child = (Cost at highest activity - Cost at lowest activity) / (Highest activity - Lowest activity)

= ($13,670 - $8,050) / (188 - 90)

= $5,620 / 98

= $57.35

Fixed Operating costs at highest activity = Total cost - Variable cost

Fixed Operating costs at highest activity = $13,670 - (188 * $57.35)

= $2,888.20

5.

Expected operating cost = Fixed cost + Variable cost

Expected operating cost = $2,888.20 + (170 * $57.35)

= $2,888.20 + $9,749.50

= $12,637.70