Problem

Preparing Contribution Margin Income StatementConsider Camp Sunshine’s cost equation resul...

Preparing Contribution Margin Income Statement

Consider Camp Sunshine’s cost equation results obtained in E5-10 using least-squares regression. Suppose that Sunshine is contemplating staying open one additional week during the summer.

Required:

1. Determine Sunshine’s contribution margin per camper if each camper pays $175 to attend the camp for a week.


2. Prepare a contribution margin income statement for week 9 assuming Sunshine expects to have 65 campers that week.


3. Explain whether Sunshine should add a ninth week to its schedule.

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