Project #8679 - Cost Analysis

Assume the City of Los Angeles owns and operates a small 9-hole golf course. The sole source of revenue for that golf course is a $9.00 fee per golfer. On the cost side, the golf course has two types of costs: fixed costs, which are $600,000 annually, and variable costs, which are $4.00 per golfer.

  1. Calculate the annual break-even number of golfers i.e., the annual number of golfers at which that golf course's total revenue will equal its total costs.
  2. At that break-even number of golfers, what is the average cost per golfer to the golf course?
  3. Assume that for the year, the number of golfers at the golf course equaled that break-even number of golfers plus 5,000 additional golfers. What would be the added (i.e., "incremental") cost to the golf course of these 5,000 additional golfers?
  4. What is the average cost per golfer to the golf course when annual the number of golfers equals the break-even number of golfersplus 5,000 additional golfers?

Subject Mathematics
Due By (Pacific Time) 07/06/2013 03:00 pm
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