Pay the college and earn the same profit expected

Reference no: EM13668357

Since Jean Oldcraft has been head women's hockey coah at Casco College she has enjoyed considerable success. Oldcraft has coached at summer campus previously and now is considering a summer camp for Casco. The college would provide room, board and ice time for the campers at a price and would also take 10% of revenue. Oldcraft asks you for advice. You say that some of the important factors are setting a price, estimating enrollment, and estimating costs. After a few weeks, Oldcraft returns with the following information, gathered from various sources.

Average enrollment 90 campers
Average price for one week camp $225
Costs:
Food,charged by college $50 per camper
Insurance and T-Shirts $15 per camper
Room rent charged by college $18 per camper
Coaches' salaries $ 550 per coach
Ice arena charge $ 1,000 total
Brochures, mailing, miscellaneous $3,700 total

Oldcraft also says that other camps have typically employed one coach for each 15 campers, excluding the director (Oldcraft in this case). One problem is that you generally need to hire the coaches before you know the enrollment, although it is usually possible to find one or two at the last minute. It is, however, necessary to hire some of the coaches early so that you can use their names in brochures.

Furthermore, while the enrollment and price given are averages, wide variations exist, with enrollments ranging from 40 to 120 and prices ranging from $160 to $330. As might be expected, the better-known camps have higher enrollments at higher prices, but they also pay better, as high as $1,000 per week for a well-known coach. Oldcraft will keep the profits and suffer the losses, so she wants to be fairly confident before proceeding.

If Oldcraft hires enough coaches to meet the average enrollment and achieves all of the averages given above, what will be her profit?
What price will enable her to earn $4,000 enrolling 100 campers?
The college offers to take over the cost of brochures, mailing, and miscellaneous ($3,700 estimated) in exchange for a higher share of the revenue. If Oldcraft achieves the results from requirement 1 (meets the averages), what percentage of revenue will she be able to pay the college and earn the same profit expected in requirement 1?

Reference no: EM13668357

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