16 Question 2 David operates a golf school in Victoria. British Columbia. The school offers golf instruction in one week sessions. The school was founded by David to capitalize on his reputation as a professional golfer. The school has been operating for the past 6 months and David is looking for ways to improve the financial position of his business. The school's business model is based on a philosophy of providing enrollees a total package, for a "worry-free" golf learning experience. Students pay a single fee, which covers instruction, lodging, and food. The students receive instruction Monday through Friday. On Saturday the students play two rounds of golf at an exclusive 36-hole championship course, followed by a farewell dinner celebration. The fee paid by students also covers the green fees for the golf course as well as the dinner. The school has been averaging 36 students weekly and has 6 instructors. David is not an instructor at present. The following is an itemization of the student fees and the expenses incurred. Student fee S 2.875 Student expenses (per student) Room costs Food Souvenirs and supplies Green fees 1.080 750 150 250 Instructor expenses (per instructor) Instructor weekly salary 1.690 Other expenses (per week) Vehicle lease Golf carts lease Facilities rent 1.510 500 20.000 a Required Calculate the current operating profit per week. b. David has learned that other golf schools are offering students a student to teacher ratio of a maximum of 4:1. David's research shows that if he adopts a 4:1 student to teacher ratio, he will be able to raise the student fee to $3,360. He also believes that the weekly enrollment number will remain at 36 students on average. Determine whether David should adopt a student to teacher ratio of 4:1 and increase the fee 2 4 c. Refer to the original data (ignore the information in part b)) and calculate the break-even point. d. Assume that David's school is operating according the original data. A large corporation wants to send 2 executives each week to the golf school. If David does not want to exceed the current student teacher ratio, determine whether he should accept the two additional students. Assume that enrollment remains at 36 students weekly. 16 Question 2 David operates a golf school in Victoria. British Columbia. The school offers golf instruction in one week sessions. The school was founded by David to capitalize on his reputation as a professional golfer. The school has been operating for the past 6 months and David is looking for ways to improve the financial position of his business. The school's business model is based on a philosophy of providing enrollees a total package, for a "worry-free" golf learning experience. Students pay a single fee, which covers instruction, lodging, and food. The students receive instruction Monday through Friday. On Saturday the students play two rounds of golf at an exclusive 36-hole championship course, followed by a farewell dinner celebration. The fee paid by students also covers the green fees for the golf course as well as the dinner. The school has been averaging 36 students weekly and has 6 instructors. David is not an instructor at present. The following is an itemization of the student fees and the expenses incurred. Student fee S 2.875 Student expenses (per student) Room costs Food Souvenirs and supplies Green fees 1.080 750 150 250 Instructor expenses (per instructor) Instructor weekly salary 1.690 Other expenses (per week) Vehicle lease Golf carts lease Facilities rent 1.510 500 20.000 a Required Calculate the current operating profit per week. b. David has learned that other golf schools are offering students a student to teacher ratio of a maximum of 4:1. David's research shows that if he adopts a 4:1 student to teacher ratio, he will be able to raise the student fee to $3,360. He also believes that the weekly enrollment number will remain at 36 students on average. Determine whether David should adopt a student to teacher ratio of 4:1 and increase the fee 2 4 c. Refer to the original data (ignore the information in part b)) and calculate the break-even point. d. Assume that David's school is operating according the original data. A large corporation wants to send 2 executives each week to the golf school. If David does not want to exceed the current student teacher ratio, determine whether he should accept the two additional students. Assume that enrollment remains at 36 students weekly