Use the same information for Outdoor Experiences Pty Ltd in exercise 22.7. The accountant can’t make decisions on the future of the company without your authority as manager, so he believes it is important to work through the possible solutions together so that you understand what you are authorising.

Required

(a) Using the information from exercise 22.7, calculate the CVP equation for the operations of Outdoor Experiences Pty Ltd.

(b) What is the break-even number of campers for Outdoor Experiences Pty Ltd?

(c) You believe that the maximum number of campers that the camp site can accommodate in a year is 3000. What would you suggest to change the CVP equation for Outdoor Exercises Pty Ltd so that you can make a profit with this number of campers?

Exercise 22.7

OOutdoor 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.

Transcribed Image Text:

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 Loss Amount $750 000 375000 150000 225000 Percentage 100 (10) 8888 2009||| 150000 75000 10 75000 300 000 $ (75000)