Two-alternative graphic analysis Woodbine Family Theme Park is a large family resort which includes an amusement park, a water park, a family campground, and a golf resort. The management of the park is skilled and confident at operating all of the resort facilities, but an area of concern is security. Woodbine management has had little experience in planning and operat- ing security systems. The current security system is operated by the company that constructed the park, but the last of the construction activities is nearly complete and the current security force will be leaving soon. Woodbine has two plans under evaluation. One alternative is to hire a private security force from a national security firm. The charge for the service would be an annual fixed fee of $400,000 plus $35 per patrol hour. If Woodbine develops its own security system, the costs are expected to be:

Management estimates 1,500,000 park visitors during the first season of operations. National statistics indicates there should be one patrol hour per 100 park visitors to maintain adequate security.

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Annual fixed cost: Depreciation, equipment..... Supervision .... Occupancy costs.... $450,000 120,000 100,000 Variable cost per patrol hour: Labor.... $13.00 Gasoline.... 4.00 Other variable costs 3.00