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Alameda Tile sells products to many people remodeling their homes and thinks that it could profitably offer courses on tile installation, which might also
Alameda Tile sells products to many people remodeling their homes and thinks that it could profitably offer courses on tile installation, which might also increase the demand for its products. The basic installation course has the following (tentative) price and cost characteristics. Tuition Variable costs (tiles, supplies, and so on) Fixed costs (advertising, salaries, and so on) 410 per student 240 per student 88,400 per year Required: a. What enrollment will enable Alameda Tile to break even? b. How many students will enable Alameda Tile to make an operating profit of $34,000 for the year? c. Assume that the projected enrollment for the year is 860 students for each of the following (considered independently): 1. What will be the operating profit (for 860 students)? 2. What would be the operating profit if the tuition per student (that is, sales price) decreased by 8 percent? Increased by 23 percent? 3. What would be the operating profit if variable costs per student decreased by 12 percent? Increased by 18 percent? 4. Suppose that fixed costs for the year are 9 percent lower than projected, whereas variable costs per student are 8 percent higher than projected. What would be the operating profit for the year? Complete this question by entering your answers in the tabs below. Req A Req B Req C1 Req C2 Req C3 Req C4 What enrollment will enable Alameda Tile to break even? Break-even point students How many students will enable Alameda Tile to make an operating profit of $34,000 for the year? Number of students Assume that the projected enrollment for the year is 860 students for the following (considered independently): C1. What will be the operating profit (for 860 students)? Operating profit Assume that the projected enrollment for the year is 860 students for the following (considered independently): C2. What would be the operating profit if the tuition per student (that is, sales price) decreased by 8 percent? Increased by 23 percent? (Do not round intermediate calculations.) Sales price decreased by 8 percent: Operating profit by Sales price increased by 23 percent: Operating profit by Assume that the projected enrollment for the year is 860 students for the following (considered independently): C3. What would be the operating profit if variable costs per student decreased by 12 percent? Increased by 18 percent? (Do not round intermediate calculations.) Variable costs per student decreased by 12 percent: Variable costs per student increased by 18 percent: Operating profit by Operating profit by Assume that the projected enrollment for the year is 860 students for the following (considered independently): C4. Suppose that fixed costs for the year are 9 percent lower than projected, whereas variable costs per student are 8 percent higher than projected. What would be the operating profit for the year? (Do not round intermediate calculations.) Operating profit
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