The New Recreational Company sells two-year memberships to its recreational facilities. For $2,200 in advance, each member receives the right to 30 nights at the company’s campgrounds, 20 rounds on its golf courses, and 50 hours on its bowling lanes. In 2007 the company sold 400 memberships. Members used the campgrounds for 4,100 nights, played 3,000 rounds of golf, and bowled for 10,000 hours. The relevant cost information for the 400 contracts is as follows:Initial direct costs ……………………….$ 40,000Annual indirect costs ………………………100,000Estimated (and actual) total direct costs for two-year period ………….340,000Direct cost perNight at campground ………………………..10Round of golf……………………………..15Hour of bowling ………………………….5RequiredPrepare the income statement for 2007.View Solution:
The New Recreational Company sells two year memberships to its r



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