Question
Western River Expeditions (www.westernriver.com) runs river rafting trips on the Colorado, Green, and Salmon rivers. One of its most popular trips is a six-day trip
Western River Expeditions (www.westernriver.com) runs river rafting trips on the Colorado, Green, and Salmon rivers. One of its most popular trips is a six-day trip down the Grand Canyon, which features famous rapids such as Crystal and Lava Falls as well as the awesome scenery accessible only from the bottom of the Grand Canyon. The company runs trips of one or two rafts, each of which carries two guides and up to 18 guests. The company provides all meals on the trip, which are prepared by the guides.
In terms of the hierarchy of activities, a guest can be considered as a unit and a raft as a batch. In that context, the wages paid to the guides are a batch-level cost because each raft requires two guides regardless of the number of guests in the raft. Each guest is given a mug to use during the trip and to take home at the end of the trip as a souvenir. The cost of the mug is a unit-level cost because the number of mugs given away is strictly proportional to the number of guests on a trip. What about the costs of food served to guests and guides
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