TOMINDUG-.ACT-102-K7 CASE ANALYSIS Hockey Camp Since Jean Oldcraft has been head women's hockey coach at Casco College, she has enjoyed considerable success. Oldcraft has coached at summer camps 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 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 $1000 total Brochures, mailing, miscellaneous $3700 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 so that you can use their names in brochures. Furthermore, while the 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 k known coach. Oldcraft will keep the profits and suffer the losses, so she wants to be fairly confident before proceeding. as $1000 per week well- Required: 1. If Oldcraft hires enough coaches to meet the average enrollment and achieves all of the averages previously given, what will be her profit?
TOMINDUG-.ACT-102-K7 CASE ANALYSIS Hockey Camp Since Jean Oldcraft has been head women's hockey coach at Casco College, she has enjoyed considerable success. Oldcraft has coached at summer camps 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 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 $1000 total Brochures, mailing, miscellaneous $3700 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 so that you can use their names in brochures. Furthermore, while the 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 k known coach. Oldcraft will keep the profits and suffer the losses, so she wants to be fairly confident before proceeding. as $1000 per week well- Required: 1. If Oldcraft hires enough coaches to meet the average enrollment and achieves all of the averages previously given, what will be her profit?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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TOMINDUG-.ACT-102-K7
CASE ANALYSIS
Hockey Camp
Since Jean Oldcraft has been head women's hockey coach at Casco College, she has
enjoyed considerable success. Oldcraft has coached at summer camps 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 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
$1000 total
Brochures, mailing, miscellaneous
$3700 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 so that you can use their
names in brochures. Furthermore, while the 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 $1000 per week for a well-
known coach. ldcraft will keep the profits and suffer the losses, so she wants to be fairly
confident before proceeding.
Required:
1. If Oldcraft hires enough coaches to meet the average enrollment and achieves all of the
averages previously given, what will be her profit?
2. What price will enable her to earn $4000 enrolling 100 campers?
3. The college offers to take over the cost of brochures, mailing, and miscellaneous ($3700
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?
4. Write a memorandum to Oldcraft explaining the advantages and disadvantages to her
and to the college of the proposed arrangements. Use the guidelines in Appendix A.
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