Planning A Vacation

Imagine that you and some friends are planning a 7 day and 6 night vacation. You all want to rent a cabin in the woods and spend your time enjoying the great outdoors. As the accountant in your group of friends, you are put in charge of figuring out how to make your trip affordable for your group.

A quick internet search lets you find a cabin that sleeps up to 10 people. That cabin can be rented for $150 per night. If you have more than 10 people, you can rent a neighboring cabin for an additional $150 per night.

A trip to the local grocery store helps you figure out that breakfast can cost $2 per person, lunch can cost $4 per person, and dinner can cost $4 per person.

When you share this information with your friends, they tell you that they are willing to pay no more than $210 per person for the entire trip.

Requirements:

1. If you take this trip by yourself,
   1. What is your total fixed cost?
   2. What is your total variable cost?
   3. What is your total mixed cost?
   4. What is your fixed cost/person?
   5. What is your variable cost/person
   6. What is your mixed cost/person?
2. How would the numbers from #1 above change if went on this trip with 1 friend? 2 friends? 3 friends? 19 friends?
3. What is the selling price per person in this story?
4. How much money needs to be collected in total from the people going on this trip for the group to break even? (Hint: Think break-even sales.)
5. How many people need to go on this trip for the group to break even? (Hint: Think break-even units.)
6. How would the numbers from #4 and #5 above change if
   1. you were able to negotiate a 20% discount on the cost of renting the cabin?
   2. you and your friends decided to skip breakfast while on this trip (i.e., not buy food for breakfast)?
   3. you and your friends were only willing to pay $160 per person for the entire trip?