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) 470 per student 240 per student 112,700 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 $55,200 for the year? c. Assume that the projected enrollment for the year is 830 students for each of the following (considered independently): 1. What will be the operating profit (for 830 students)? 2. What would be the operating profit if the tuition per student (that is, sales price) decreased by 10 percent? Increased by 21 percent? 3. What would be the operating profit if variable costs per student decreased by 15 percent? Increased by 19 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? What enrollment will enable Alameda Tile to break even? Break-even point students Req A Req B Req ci Req c2 Req C3 Req C4 How many students will enable Alameda Tile to make an operating profit of $55,200 for the year? lumber of students Req A Req B Req C1 Req C2 Req C3 Req C4 Assume that the projected enrollment for the year is 830 students for the following (considered independently): C1. What will be the operating profit (for 830 students)? Operating profit Req A Req B Req c1 Reg C2 Req C3 Req C4 Assume that the projected enrollment for the year is 830 students for the following (considered independently): C2. What would be the operating profit if the tuition per student (that is, sales price) decreased by 10 percent? Increased by 21 percent? (Do not round intermediate calculations.) Sales price decreased by 10 percent: Sales price increased by 21 percent: Operating profit Operating profit by by Req A Req B Req c1 Reg C2 Req C3 Req C4 Assume that the projected enrollment for the year is 830 students for the following (considered independently): C3. What would be the operating profit if variable costs per student decreased by 15 percent? Increased by 19 percent? (Do not round intermediate calculations.) Variable costs per student decreased by 15 percent: Variable costs per student increased by 19 percent: Operating profit Operating profit by by Req c2 Req C4 Assume that the projected enrollment for the year is 830 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 10 percent higher than projected. What would be the operating profit for the year? (Do not round intermediate calculations.) Operating profit
