Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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
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) $ 490 per student 250 per student 122,400 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 $50,400 for the year? C. Assume that the projected enrollment for the year is 880 students for each of the following (considered independently): 1. What will be the operating profit (for 880 students)? 2. What would be the operating profit if the tuition per student (that is, sales price) decreased by 9 percent? Increased by 21 percent? 3. What would be the operating profit if variable costs per student decreased by 14 percent? Increased by 15 percent? 4. Suppose that fixed costs for the year are 10 percent lower than projected, whereas variable costs per student are 6 percent higher than projected. What would be the operating profit for the year? Reg A Reg B Reg C1 Reg C2 Reg C3 Reg C4 Assume that the projected enrollment for the year is 880 students for the following considered independently): C2. What would be the operating profit if the tuition per student (that is, sales price) decreased by 9 percent? Increased by 21 percent? (Do not round intermediate calculations.) Sales price decreased by 9 percent: Sales price increased by 21 percent: Operating profit Operating profit by by Reg A Req B Reg C1 Reg C2 Req C3 Req C4 Assume that the projected enrollment for the year is 880 students for the following considered independently): C3. What would be the operating profit if variable costs per student decreased by 14 percent? Increased by 15 percent? (Do not round intermediate calculations.) Variable costs per student decreased by 14 percent: Variable costs per student increased by 15 percent: Operating profit Operating profit by by Reg A Reg B Reg C1 Reg C2 Req c3 Reg 04 Assume that the projected enrollment for the year is 880 students for the following considered independently): C4. Suppose that fixed costs for the year are 10 percent lower than projected, whereas variable costs per student are 6 percent higher than projected. What would be the operating profit for the year? (Do not round intermediate calculations.) Operating profit
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started