Honey Lake Summer Camp
for Many Years the Honey Lake

Essay

Honey Lake Summer Camp
For many years the Honey Lake Summer Camp had used the number of campers per week to estimate weekly costs. The summer camp is open for ten weeks during the summer with a different number of campers each week. July is busiest with June and the end of August least busy. Costs from the last week of summer camp in Year 1 are used to estimate costs for Year 2 for pricing purposes. The following costs occurred during the last week of Year 1 and the costs of each cost category are expected to be the same for Year 2: $$\begin{array} { | l | r | } \hline & \begin{array} { r } \text { Wreekly } \\\text { Cost }\end{array} \\\hline \text { Supervisor's salary } & \$ 400 \\\hline \text { Cook's salary } & 300 \\\hline \begin{array} { l } \text { Camp counselor salaries (1 for each } \\\text { occupied cabin, each of } \\\text { which hold } 10 \text { campers) (5 counselors }\end{array} & 1,000 \\\times \$ 200 / \text { counselor) } & \\\hline \text { Food } ( 50 \text { campers } \times \$ 100 / \text { camper) } & 5,000 \\\hline \text { Supplies } ( 50 \text { campers } \times \$ 20 / \text { camper) } & 1,000 \\\hline \text { Utilities } ( 50 \text { campers } \times \$ 10 / \text { camper) } & 500 \\\text { Insurance (50 campers } \times \$ 20 / \text { camper) } & 1,000 \\\hline \text { Property tax (\$10,000/10 weeks) } & 1,000 \\\hline \text { Weekly total } & \$ \underline{12,200} \\\hline\end{array}$$ Cost per camper: $12,200/50 campers = $244/camper
The Honey Lake Summer Camp expects 75 campers during the second week of July.
Required:
a. What is the expected cost of that week using the average cost?
b. What is the expected cost of that week using ABC?