CVP — sensitivity analysis. Custom Wood Creations is considering introducing a new wood-carving seminar with the following price and cost characteristics:

a. What enrollment enables Custom Wood to break even?

b. How many students will enable Custom Wood to make an operating profit of $200,000 for the year'.'

c. Assume that the projected enrollment for the year is 8,000 students for each of the following situations:
(1) What will be the operating profit for 8,000 students?
(2) What would be the operating profit if the tuition per student (that is, sales price) decreases by 10 percent? Increases by 20 percent?
(3) What would be the operating profit if variable costs per student decrease by 10 percent? Increase by 20 percent?
(4) Suppose that fixed costs for the year are 10 percent lower than projected, whereas variable costs per student are 10 percent higher than projected. What would be the operating profit for the year?

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Tuition Variable Costs (wood, supplies, etc.) Fixed Costs (advertising, instructor's salary, insurance, etc.) $200 per Student $120 per Student $400.000 per Year