Homework Question: Costs and their Behaviour

Glenda is planning a trip of 8 days to Florida. She has located a condominium and has put a deposit down on the unit. The rental company has a maximum occupancy for the condominium of 7 adults. There is an amusement park that she plans to visit. She is going to use her parents car, an SUV that can carry up to 6 people and their luggage. The SUV can travel an average of 9.4L/100km, the total distance is approximately 1,780 (travelling there plus driving around every day), and the average price of gas is $1.6 per litre. A season pass for an amusement park she wants to visit is $168 per person. Glenda estimates spending $40 per day per person for food. She estimates the costs for the trip as follows:

Condo Rental			$1,400
Gasoline			$270
Food (per person, per day)			$40
Amusement Park Season Pass (per person)			$168

Now that she has cost estimates, she is trying to decide how many of her friends she wants to invite. Since the car can only seat 6 people, Glenda made a list of 5 other girls to invite. Use her data to answer the following questions and fill out the cost table. (Answers to enter in blue-coloured cells):

Question							Answer
1. What are the total variable costs for the trip?
2. What are the average variable costs (per person) for the trip?
3. What are the total fixed costs for the trip?
4. What are the average fixed costs (per person) for the trip?
5. What are the average costs per person for the trip?
6. What would the trip cost Glenda if she were to go alone?
7. What additional costs would be incurred if a 7th girl was invited on the trip? Would this be a wise decision (from a cost perspective)? Why or why not?
8. Which cost will not be affected if a 7th girl was invited on the trip?

No. of people incl. Glenda

Total Variable Cost

Average Variable Cost

Total Fixed Cost

Average Fixed Cost

Average Cost per Person

1

2

3

4

5

6

7

Homework Question: Costs and their Behaviour

Glenda is planning a trip of 8 days to Florida. She has located a condominium and has put a deposit down on the unit. The rental company has a maximum occupancy for the condominium of 7 adults. There is an amusement park that she plans to visit. She is going to use her parents car, an SUV that can carry up to 6 people and their luggage. The SUV can travel an average of 9.4L/100km, the total distance is approximately 1,780 (travelling there plus driving around every day), and the average price of gas is $1.6 per litre. A season pass for an amusement park she wants to visit is $168 per person. Glenda estimates spending $40 per day per person for food. She estimates the costs for the trip as follows:

Condo Rental			$1,400
Gasoline			$270
Food (per person, per day)			$40
Amusement Park Season Pass (per person)			$168

Now that she has cost estimates, she is trying to decide how many of her friends she wants to invite. Since the car can only seat 6 people, Glenda made a list of 5 other girls to invite. Use her data to answer the following questions and fill out the cost table. (Answers to enter in blue-coloured cells):

Question							Answer
1. What are the total variable costs for the trip?
2. What are the average variable costs (per person) for the trip?
3. What are the total fixed costs for the trip?
4. What are the average fixed costs (per person) for the trip?
5. What are the average costs per person for the trip?
6. What would the trip cost Glenda if she were to go alone?
7. What additional costs would be incurred if a 7th girl was invited on the trip? Would this be a wise decision (from a cost perspective)? Why or why not?
8. Which cost will not be affected if a 7th girl was invited on the trip?

No. of people incl. Glenda	Total Variable Cost	Average Variable Cost	Total Fixed Cost	Average Fixed Cost	Average Cost per Person
						1
2
3
4
5
6
7