4 Decision Making \#1 5 Great Escapes offers guided hiking trips in Alaska. Great escapes provides a guide and all necessary food and equipment. 6 Currently the company provides an average of 650 number of hikers per month 7 Maximum capacity is 800 number of hikers per month The daily fee charged per hiker for this service: 10 Variable costs per hiker: 11 Food 12 Guide cost 13 Supplies 14 Insurance 15 16 7 Required: Determine the effect of each of the following situations on monthly profits. You must use cell referencing to determine the effect of each situation. \#1 What is current monthly profit? 3 Each what-if situation is to be evaluated independently of all others. \#2 What if there is a $15 increase in the daily fee charged per hiker, which would result in a 150 decrease in the number of hikers per month What would be the new monthly profit? \#3 What-if there is a \$7 decrease in the daily fee charged per hiker, which would result in a 300 increase in the number of hikers per month The last 100 hikers would be provided services by subcontractor at a cost of $65 per hiker What would be the new monthly profit? \#4 What-if a tour agency proposes a special one-time order of 4 The insurance cost will not be incurred on these hikers, since the tour agency covers this cost. 5 There would be an additional fixed administration fee of 7 What would be the income from only the special order? The company should accept the special order, since it will increase income. The relevant costs were the food, guide cost, supplies, and the fixed administration fee of $250. These costs are relevant, since the costs will occur based on the special order. The fixed costs per the month of equipment rental, administration, and advertising are irrelevant, since these costs will incur no matter the decision. The variable insurance cost is also irrelevant, since it will not be incurred in the special order