ABC and Average Cost in a Service Industry

question 2

Essay

ABC and Average Cost in a Service Industry
For many years the Honey Lake Summer Camp had used the number of campers per week to estimate weekly costs.The summer camp is open for ten weeks during the summer with a different number of campers each week.July is busiest with June and the end of August least busy.Costs from the last week of summer camp in 1998 are used to estimate costs for 1999 for pricing purposes.The following costs occurred during the last week of 1998 and the costs of each cost category are expected to be the same for 1999: Cost per camper:$12,200/50 campers = $244/camper
The Honey Lake Summer Camp expects 75 campers during the second week of July.
Required:
a.What is the expected cost of that week using the average cost?
b.What is the expected cost of that week using ABC?

---

Definitions:

Fetishism of Commodities

A term from Marxist theory describing the way in which the social relationships involved in production are expressed as relationships between commodities, obscuring the labor that went into them.

Economic Exchanges

Transactions that involve the transfer of goods, services, or money between individuals, businesses, or entities within an economic system.

Social Structures

The organized pattern of social relations and institutions that together compose society, providing a framework within which social interaction occurs.

Species Being

A concept in Marxist theory referring to the inherent nature of humans to shape their environment and themselves through labor.