Outdoor Experiences Pty Ltd runs camps for school children and sporting clubs that provide 3 days of canoeing, horse riding, abseiling and skiing. As a graduate with a sports and recreation degree, you have eventually worked your way up to managing the camps. The accountant has presented you with the following data and wants to work with you to improve the company’s financial position.

Required
(a) Taking into account the nature of the activities provided by Outdoor Experiences Pty Ltd, what costs are likely to be fixed regardless of the number of campers and what costs are likely to vary in total with the number of campers?
(b) Suggest specific ways in which the company could make a profit by changing its pricing, reducing fixed costs and reducing variable costs.

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Sales revenue (2500 campers) Variable cost of sporting activities Variable promotional and other expenses Contribution margin Fixed expenses: Selling and site maintenance Administrative Finance and other Amount $750000 375000 150 000 225000 Loss Percentage 100 150000 75000 75000 300 000 $ (75000) 8388 8ee (10)