6a. The City of Arlington has constructed a swimming pool in FY 2008 and you
have been asked to calculate the user charge based on an estimate of 10,000
swimmers. Since the pool is inside a building it will remain open all year.
Household income in Arlington is $100,000.00 per year. After you calculate the
user fee, explain the impact of the fee on the population. Use the cost-volume
profit formula, the information in the directions, and the items listed below to
construct your user charge. This problem can be completed in a word processing
program.
Employee salaries, insurance, fringe benefits, equipment
maintenance, and utilities are projected at $65,000.00.
The city received a one-time gift of $60,000.00 to subsi-
dize the first year of operation.
Allocated fixed costs are projected at $25,000.00.
Variable costs are projected at $3.00 per swimmer.
Using the same figures estimate the user charge for the
second year as well. However, assume that the number of
swimmers increases by 2,000 and the local government
will take $45,000.00 from the general fund to subsidize
the pool. What can the government do to maintain the
current user fee?
