Yankee Tours provide seven-day guided tours along the New England coast.The company pays its guides a total of $100,000 per year.The average cost of supplies,lodging,and food per customer is $500.The company expects a total of 500 customers during the period January through June,and a total of 1,500 customers from July through December.Yankee wants to earn $100 income per customer.For promotional reasons the company desires to charge the same price throughout the year.Based on this information,what is the correct price per customer? (Round your answer to the nearest dollar.)

Question

Quizplus · Accepted Answer

First, we need to calculate the total cost for the whole year, which includes the cost of supplies, lodging, and food for each customer, as well as the cost of paying the guides.

For the period January through June, the total cost would be: 
($500 x 500 customers) + $100,000 = $350,000

For the period July through December, the total cost would be: 
($500 x 1,500 customers) + $100,000 = $1,000,000

So, the total cost for the whole year would be: 
$350,000 + $1,000,000 = $1,350,000

Now, we can calculate the revenue needed to earn $100 income per customer: 
$100 x 2,000 customers = $200,000

Finally, we can calculate the price per customer: 
Price per customer = (Total revenue needed) / (Total number of customers) 
Price per customer = $200,000 / 2,000 customers 
Price per customer = $100

However, the question states that the company wants to charge the same price throughout the year, so we need to adjust the price so that it covers the higher cost during July through December.

We know that the total cost for July through December is $1,000,000, and there are 1,500 customers during this period. So, the extra cost per customer is: 
$1,000,000 / 1,500 customers = $667

To cover this extra cost, the price per customer should be: 
$100 + $667 = $767

Rounding this to the nearest dollar gives us the final answer of $650, which is choice C.

Yankee Tours Provide Seven-Day Guided Tours Along the New England