Al Khoud Training Center (KTC) is an industrial training company operating in Muscat Knowledge Oasis. Following

increased competition and customer expectations, KTC has been forced to revisit its operational strategy and its

quality standards. The following budgeted data for 2022 are available:

Number of Trainees 5,500 Operating Income OMR24,000

Budgeted Variable Cost per Trainee Budgeted Fixed Cost per Training

Trainee's Support Service OMR16 Facilities 14,800

Training Materials OMR21 Salaries 13,000

Foods OMR20

Miscellaneous Products & Services OMR10

Based on the customer survey it conducted, KTC has learned that several improvements to its products and

services are required. The improvements would provide the following impacts:

Increase in the Number of Trainees 30%

Increase in the Total Variable Costs 25%

Increase in the Total Fixed Costs 25%

You are required to:

(i) Calculate the budgeted revenue per trainee based on the available data.

(ii) Assuming that budgeted revenue per trainee remains unchanged, explain (with numerical justifications) whether KCT should implement the suggested improvements.

(iii) Assuming that budgeted revenue per trainee remains unchanged, calculate the variable cost per trainee which makes the suggested improvements irrelevant to KCT.