Suppose HDC rents spaces for both RVs and tent camping. The price and cost characteristics for each… 1 answer below »
Suppose HDC rents spaces for both RVs and tent camping. The price and cost characteristics for each are as follows (one unit is a tent or RV space rented for one day):
Price per
Variable Cost
Units Rented
Unit
per Unit
per Year
Tent space
$ 6
$3
6,000
RV space
15
7
9,000
The fixed costs of HDC are $60,000 annually. Assuming the mix of tent and RV spaces is the same as the current mix, how many tent spaces and how many RV spaces must be rented annually for HDC to break even?