Northlake Nordic Centre Inc.’s season costs: groomer fuel 3.00 per skier-day; café supplies 2.50 per skier-day; rental-ski maintenance 1.50 per skier-day; trail-pass printing and card fees 2.00 per skier-day; lodge lease 96,000; salaried staff 118,000; amortization 41,000; insurance 18,000; loan interest 24,000; advertising 18,000. Build the cost equation and predict total cost at two volumes.

Answer

Variable cost per skier-day → 9 · Total fixed costs for the season → 315000 · Total cost at 18,000 skier-days → 477000 · Total cost at 25,000 skier-days → 540000

Cells - Variable cost per skier-day · ±0.005 - Total fixed costs for the season · ±0 - Total cost at 18,000 skier-days · ±0 - Total cost at 25,000 skier-days · ±0 Variable: 3.00 + 2.50 + 1.50 + 2.00 = **9.00** per skier-day. Fixed: 96,000 + 118,000 + 41,000 + 18,000 + 24,000 + 18,000 = **315,000**. Total cost = 315,000 + 9 × units: at 18,000 → **477,000**; at 25,000 → **540,000**. Excel: `=315000+9*B2`.

OpenStax Managerial Accounting §2.3 (building the cost equation bottom-up, including a service firm); Hermanson Vol 2 ch 21 (concept map I6, I7)