. A local authority, whose area includes a holiday resort situated on the east coast, operates, for 30 weeks each year, a holiday home which is let to visiting parties of children in care from other authorities.

. A local authority, whose area includes a holiday resort situated on the east coast, operates, for 30 weeks each year, a holiday home which is let to visiting parties of children in care from other authorities. The children are accompanied by their own house mothers who supervise them throughout their holiday. From six to fifteen guests are accepted on terms of £100 per person per week. No differential charges exist for adults and children. Weekly costs incurred by the host authority are:
Items £ per guest
Food 25
Electricity for heating and cooking 3
Domestic (laundry, cleaning, etc) expenses 5
Use of minibus 10
Seasonal staff supervise and carry out the necessary duties at the home at a cost of £11,000 for the 30-week period. This provides staffing sufficient for six to ten guests per week, but if eleven or more guests are to be accommodated, additional staff at a total cost of £200 per week are engaged for the whole of the 30-week period. Rent, including rates for the property, is £4,000 per annum and the garden of the home is maintained by the council’s recreational department which charges a nominal fee of £1,000 per annum. You are required to:
(i) tabulate the appropriate figures in such a way as to show the break-even point(s) and to comment on your figures
(ii) draw a chart to illustrate your answer to (b) (i) above

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